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Acquiring Properties Below Market Price

by Bella Palmer

Investors are always looking for the best property deals. A good knowledge of the normal property market prices is very important when it comes to getting a good deal. However, buying properties at the normal market price is not the only way to purchase real estate. In fact, some property investors focus almost exclusively on purchasing properties that are offered for sale at below market value.

In order to buy properties at prices significantly below their market value, one has to know where to start looking for them. It can be helpful to think about the reasons a property may be offered at such a good price. Repossessed properties are good examples of this type of deal. There is generally a need to sell repossessed properties quickly. In these cases, the need to sell quickly often takes precedence over getting a high selling price. As a result, these properties can often be a great buy. Of course, it is important for an investor to understand what he or she is purchasing, since sometimes repossessed properties can require a bit of work. However, even considering the cost of necessary repairs or renovations, a repossessed property can be a great investment property.

In other cases, a property might be offered below market value simply because another investor needs to sell a property quickly. Perhaps there is a need to free up financial assets, or there may be a time-sensitive real estate deal that he or she wants to take advantage of. Whatever the reason, a seller who is highly motivated to sell quickly is generally more concerned with the speed of the sale as opposed to the selling price. Again, it is important to understand what one is buying. In some cases, an investor may have purchased the property for a good price, with the intention of making the repairs and renovations necessary in order to sell it at a higher price. Before considering the property to be a good deal, it is important to understand what repairs and renovations still need to be completed.

Properties that have been on the market for an extended period of time are also potential candidates for great deals. A property that lingers on the market is costing the owner money every day that it remains unsold. As such, these property owners are often highly motivated to sell, even at below market rates.

The student property market is currently another hot field within the real estate investment world. The need for student properties is high, and is still continuing to grow. Properties that are located within close proximity to good universities can be good candidates for student property investments. As with any property investment, location is extremely important when considering a potential student property. It should be a desirable location from a student’s standpoint, but also a good location from an investor’s standpoint. For example, a property located close to a university that is growing, especially if it tends to attract a lot of foreign students, would likely be a good investment. However, a property located close to a university with a declining enrollment may not be a good choice.

This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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