Seeking value is important when it comes to making any investment but especially with property. Some property can be over priced and others under-priced and I know which side of that equation I’d prefer to be on. Determining the price of a property isn’t an exact science as even experienced surveyors generally determine property valuations based upon comparable sales in the area and a bit of good old fashioned guess work. Websites such as Zoopla and Rightmove provide quick and easy valuation services however they often prove to be inaccurate especially if there haven’t been many comparable sales to your property in that area.
When determining price, it is important to compare apples with apples. By that I mean, a brand-new property with all the latest bells and whistles as well as the top of the range fixtures and fittings isn’t comparable to a 100-year-old property on the other side of town. Searching lowest to highest on Zoopla is a terrible idea as you’ll first be presented with the cheapest and nastiest properties in an area.
Balancing price with desirability is very important. The abovementioned cheap properties are generally cheap for a reason which is usually due to a lack of demand driven by a lack of desirability. This is the opposite of what you want when investing in property as an undesirable property won’t rent or sell well. If you’re an experienced builder or fancy yourself as a “homes under the hammer contestant” then of course you could change that with a major renovation but for most “mum and dad investors” the focus should be on passive income not the business of property development. Renovating properties to add value might be made to look easy by the likes of Sarah Beany however it is a profession and should not be taken lightly or assumed to be the easy road to riches. Many an investor has been burnt by dodgy Dave builders, perceived fixer uppers properties that cost way more to fix than they are worth and estate agents that over promise and under deliver so buyer beware.
Balancing desirability with price is important. If you have the most desirable property in the most desirable location, it will rent and sell very easily but that property will often be expensive. We like to target areas with strong rental yields, affordable property prices in comparison with average incomes, strong employment and employment growth as well as infrastructure in place as well as infrastructure spending underway. Essentially all the ingredients that equate to a market moving in the right direction.