Property

‘If I’d known then what I know now’

To value a property is more art than science. The worth of a property is based on an opinion or opinions. If you ask three valuers the value of a property they will probably provide you with three different figures. A property valuers tolerance is normally about 10% but that 10% could be all your profit or a sizeable amount on a property in central London. Just remember there is no definitive view of the market value of the property and therefore your consideration once decided upon a property is to try and uplift the maximum from the property, this is probably why landlords, rightly or wrongly, have a perceived preference to certain property valuation companies. Remember:- How often have you seen Sarah Beeney on Property Ladder obtain three contrasting property valuations? and lets not forget the valuers opinions differ both before and after the refurbishment works.

Some people find ‘doing up a property’ themselves gives them a good feeling. The problem with getting a kick from such work is that you may not be skilled in this area and become side tracked from finding under market value properties. If this was your aim why didn’t you become a builder instead of a landlord? In today’s society it is important to specialise and many landlords have come to me and said ‘in my early days the biggest mistake I made was to do the works myself’. You will find less under market value properties if you spend months ‘doing up’ each property you purchase.

If the deal doesn’t stack then walk away. One of my most successful landlords can succumb to temptation. Even with 100’s of properties this landlord made a fatal mistake; he went to auction and started bidding against a local rival landlord. He won but at a price…about £25,000 loss.
Time and time again I get told (not asked) that my statement ‘Landlords buy at under market value and refinance to market value)’ isn’t realistic in today’s market. If this was so why is our mortgage split still and always has been approximately 50% remortgages and 50% purchases? The market has become more competitive for all those in the Buy To Let sector of the economy. Buy To Let mortgage lenders have found it increasingly more competitive and mortgage rates continue to drop at a significant rate. We, Landlord Mortgages, have new competitors. Mortgage brokers have started to specialise in this market but neither us or the lenders stand still. We use our experience to redesign products; adjust criteria, improve service, reduce costs (margins) and more importantly work harder in a clever way. My most experienced landlords still say to me ‘Can’t find any property’ but they soon kick it up a gear and spend more time searching the deals when their ‘bottom line’ starts to fall. The basic reasons for vendors selling at under market value will almost definitely always stand true.