Property Investors Wanted

If you would like to talk to a chartered surveyor about investing in property, mortgage matters, market values or any other matters please call 0800 298 5424 and a chartered surveyor for a friendly chat.

Good property deals

Whether the market is going up, going down or staying still we regularly get advised about property that is for sale and offered to us. These type of properties would suit the long term property investor as the properties can usually be brought at below market value, some being cashflow positive, some not and some requiring work and some not.

Open Market Value Defined

The open market value or market value is the normal value that houses are sold at. This is the value of a property they are willing to sell to a willing buyer after a reasonable amount of marketing by, say, an estate agent or on the internet, etc. This is the normal value.

Below Market Value Defined

The below market value is exactly that, one which is sold at below the market value.

Off market transactions

Property can be found in all sorts of places at below market value. This can range from properties with structural problems, such as cracking, distressed sellers to auctions and probate sales. You will surprised at what is available.

The property markets and background information

Data has been collected by the Halifax Building Society, as was, and now Halifax Bank and also the Nationwide for some time, with the Land Registry collecting data in more recent years, as has the Royal Institution of Chartered Surveyors. It can be argued that the Halifax data and the Nationwide data has been collected from a limited source, although the Halifax are said to be the biggest lender of mortgages in the country, data will be affected by where they sell most mortgages and the type of mortgages, etc, even though they do adjust the data to reflect this, as do the Nationwide.

The Land Registry is arguably the most accurate system of collecting information, albeit that it has only been available in recent times, and the Royal Institution of Chartered Surveyors is more a feel for the market from the chartered surveyors that are involved in the residential market and then this is a sample of those that return the surveys. We have chosen to look at the Nationwide and the Halifax surveys as they give a long term picture. As you can see, the general trend in property investment is upwards, as can be seen in the graph.

The problem with property is that it is not a liquid asset

By this we mean that when you save with a bank or building society you can gain access to your money almost instantly depending upon the type of account. When you invest in stocks and shares, again you can gain access to your money almost instantly, whereas if you are involved in the housing market to gain access to your money takes time, depending upon how the market is. If you are selling into a good market it can take just a few weeks, if you are selling into an okay market, perhaps a month or two or three, if you are selling into a bad market it can take months and months. This is why property is described as not being liquid.

The Advantages Are It Always Has Some Value

If you invest in a bank or building society your money will always have some value, usually in most cases a greater value than what you put in, albeit that it may not keep up with inflation. The same is true with property investment, although in the long term (ten years plus) it is shown that you do get an increase in value. In the short term you may have a decrease, however there is usually a value left. Even if the property burns down you will have the value of the land and your insurance claim (so don't forget to insure your property). However, with stocks and shares it is not that unusual for their value to reduce considerably, or indeed cease trading altogether. This is what we mean by at least property will always have value.

Do You Need Cash Flow To Invest In Property?

Unlike investing in a bank or building society where you can regularly save and stop making your savings if your situation changes (subject to the agreement you have with the bank or building society), or in the case of stocks and shares equally you can stop investing if your situation changes (again, subject to what agreement you have with your stockbrokers). With property you do have to keep investing in the form of paying the mortgage, unless you are in the position of having the cash to buy outright, which we will talk about later on within this article, so you will always need to keep paying the mortgage.

One of the beauties of property is that you can rent the property out and effectively have someone else paying the mortgage for you. However, you do have to be aware of periods of what the property is empty, known as voids, or needing repairs, which will cost you money. It could, therefore, be argued that you will always need cash flow.

We run a variety of courses in property investment:

Property as an Investiment - Training Courses

We hope the above helps you understand about investing in property. If you would like any further help and advice with regard to this then please call us on 0800 298 5424 and a chartered surveyor will call you back for a chat.

Please note we are independent chartered surveyors.

We hope you found the article of use and if you have any experiences that you feel should be added to this article that would benefit others, or you feel that some of the information that we have put is wrong then please do not hesitate to contact us (we are only human).

If you think or feel differently to the above, or feel that we have made a mistake or error please kindly contact us as we wish to change and amend any errors.

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