Tip:
Highlight text to annotate it
X
"Beat The 'EXPERTS' & Find The Best Buy To Let Deals In Your Area"
Half the battle in property is knowing what makes a good investment, the other half is
in knowing how to find the very best buy to let dealsÖ
Here I will share with you how to do both.
"Finding The Very Best Buy To Let Deals"
Why do criminals rob banksÖ.?
Because thatís where the money isÖ!
Well many investors and even ëExpertsí assume the same mentality (no I donít mean robbing
banks :) )
They follow the crowd when it comes to finding their buy to let investments. They head to
Estate Agents and AuctionsÖ. because thatís where the properties areÖ!
Now iím not knocking them, you can find great deals here, but letís think about this logically.
I bet this is the first place you would look to buy a property right?
WellÖ so does 99% of other buyers, and herein lies the problem.
This is where the competition is.
Where thereís lots of demand thereís competition, and this drives prices up, so you can end
up over paying.
The trick is to buy at a discount. So to get the very best buy to let deals you sometimes
need to observe the masses and do the opposite. You need to have as many angles as possible
and this involves thinking outside of the box
There are thousands of properties sold every year that donít even hit the market and get
as far as the estate agents and the auction housesÖ These are the vendors you need to
be speaking to
So how do you find these deals?
> Vendors that choose to sell via estate agents do so to get the best possible priceÖ
> Vendors that choose to sell direct do so to get the quickest possible saleÖ
Think about that for a second
If you were selling your property and time wasnít an issue you would go to your local
estate agent right?
Weíll what about if you had to sell in 6 weeksÖ or even 4 weeksÖ Where would you
turn then?
These sellers simply donít go to their estate agents because they know the average sale
could take them months. They need to sell and they need to sell quick, so they try and
take the sale in to their own hands.
They look to contact adverts in their local paper, go on google and type in ësell my
home quickí or they even respond to the big yellow leaflet thatís just dropped through
their door from a ëlocal investorí.
So if you want sellers that are motivated, and wantÖ no NEEDÖ. to sell quick. Then
this is where you need to be.
Be proactive, get your name out there and get vendors contacting you first, and you
will be picking up the very best buy to let deals for property investments in your area.
But if you want a few cheats to get you started and give you the upper hand on most experts
in your area then take a look at these websites
> Property snake will help show you properties that have had recent price reductions, which
is a sure fire sign of a motivated seller
> And Property Bee is a great little tool that shows you when details change on a property
listing on sites like Rightmove. This way you can keep track on when an agent changes
the price and even description, and you can then spot which sellers are getting twitchy
and need to start selling quickly
"What Makes An Exceptional Buy To Let Deal"
No youíve found a bunch of properties, how do you know which of these will make exceptional
deals
One of the most important aspects to consider is the rental yield.
A low rental yield could mean your subsidising the propertyÖ.. not good !
Personally I only look for rental yields of 8%+ for my properties, and when I am sourcing
for clients
This is so there is enough income in each property to cover mortgage costs, maintenance,
void periods and other miscellaneous expensesÖ. AND still make a profit.
To calculate the rental yield it is simplyÖ.
One years rental income ˜ the purchase price of the property ◊ 100 = The Rental Yield
So letís say you have a property that costs you £75,000 to buy, and is ready to let (i.e.:
no refurbishment is required), and the monthly rent is £500 per month.
The yearly rent is therefore £6,000Ö so the calculation would be
£6,000 ˜ £75,000 = 0.08 x 100 = 8% Rental Yield
Do this calculation for each property, and you will quickly know if it would work as
a buy to let and if the rental yield is high enough for you
Remember 8%+ rental yields should give you some solid buy to let deals, especially when
you consider this article by the telegraph has a headline about ëblinding returnsí
on buy to lets at only 5.9%Ö.
"You Make Your Money When You Buy"
So youíve found a property with a cracking rental yield, what nextÖ..
Smart investors make their money when they buy
If you over pay for a property itís going to take you a while to make it back, but buy
at a discount and your locking in equity from day one AND giving yourself a buffer incase
property prices change
So what discount should you look for to get the best buy to let deals?
If I was to take a poll of all of my investor contacts on what discounts they look for,
I guarantee you it would be between 15-25%
I know this because iíve done it!
Regardless of their situation, what their aims are and the area they are based in, the
answer always comes back the same.
This is the discount smart investors look for, because they realise theyíre not going
to buy great properties for pennies, but they know by only dealing with motivated sellers,
they hold the cards and can negotiate well.
"Conclusion"
So remember dealing with Motivated Sellers, looking for a solid 8%+ rental yield and sourcing
properties from all avenues, is the key to finding the very best buy to let deals and
growing a profitable portfolio
It would be great to hear your thoughts, so let me know what discounts and rental yields
you look for in your residential property investments?
Ö.in the comments below