Imagine being able to waltz into the property market with a pile of cash and get a massive 20 percent discount on any house you buy?
It seems like a dream. But it is something that can happen from time to time. And it’s how property moguls make their millions. They find underpriced assets and then bring them up to standard.
At any given time, there are people in the property market who are desperate to sell because they want cash fash.
Think of estate executors. These people often want to flog the assets from the deceased’s estate as soon as possible so that they can distribute funds to all the beneficiaries. And, interestingly, the people who stand to benefit want this too. Most of them would prefer to have cash in their pockets immediately instead of having to wait. That way they can avoid all the hassle of selling at the going market rate.
Other people are in this position too. Banks that repossess homes, for instance, often sell at a discount. So too do people who want to downsize to pay off debts or release cash. For them, acting immediately is the central goal.
There are opportunities like this all over the place. It’s just a question of finding them. Once you do, you can usually net big returns – perhaps above 20 percent if you flip the property within a year.
Look For Distressed Sellers
Distressed doesn’t necessarily mean people who are emotional about selling their homes. It just means finding sellers who have a very good reason for selling fast. An elderly couple, for instance, might want to sell their home quickly to release equity for an around-the-world cruise.
Distressed sellers will usually try to keep their negotiating position private. But many will tell you inadvertently why they’re selling (or their estate agents will do that for them).
Get A Survey
Getting a 20 percent discount on a property might sound like pie in the sky thinking, but only if you fail to take precautions.
As with anything in life, there’s usually a hidden cost. Cheap real estate usually has an issue.
You can rule this out with a free property report. These indicate the recent sale price of a property, insights into the surrounding suburb, and property mapping showing you nearby places of interest.
The purpose here is to rule out any situational issues that might be leading to a lower price. Remember, not all cheap properties are bargains. Some owners have to lower their prices because they can’t sell otherwise.
Ask The Locals About The Area
Lastly, you’ll want to canvas locals about the area to find out more about it. Sometimes, street-level knowledge can tell you why certain properties seem to be going for less than the market rate.
You can also pick up a lot of information by talking to people who attend property auctions. Remember, these are a great place to pick up tenants and start building a monthly income you can reinvest.