How To Pay Less For Cheap Property

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Author: andrew stefanczyk

Article source: http://www.articlealley.com/. Used with author's permission.

Hopefully in selecting your cheap property for investment you have followed our tips detailed within our last article entitled "How Do Property Investors Find Cheap Property". You will have looked for and found an area where prices are soon to rise dramatically. You will be sure there are plenty of buyers or renters for your cheap property.

Now you need to talk to the seller about how much he will accept for the property.

First rule for a cheap property investor may seem obvious but you would be surprised at how many investors don't follow it. The rule is quite simply 'never ever offer the full asking price, no matter how much you want to buy'. The second rule is 'Don't just offer less than the asking price, offer substantially less'.

The first step in the offer process takes place way before figure is discussed. Firstly get an experienced surveyor to go through the property with a fine toothcomb. Make sure he finds everything that's wrong with it now and all repairs that are likely to be required within the next five years. Make sure that the surveyor puts a cost against each item. This I promise you will be money well spent.

Once you have the list approach the seller. Explain that your surveyor has found that the property needs a lot of work. Mention one or two of the more expensive items. Then prepare the seller for a low offer explaining that the repairs will cost substantial sums and as such your offer will not be anywhere near the asking price.

The next step is let the seller know you are in a good financial position to buy his cheap property. Your loan has been cleared by the bank and you're willing to arrange for a fast exchange of contracts and completion.

Then and only then make an offer. Maker sure its well below the asking price, possibly 25-30% less. If a cheap property is on the market for £100,000, offer £69,000. Lower the seller's expectation level. The likelihood is that depending on the attitude of the seller you will agree a figure between £80,000 and £85,000. That's a cheap property you will have bought and most importantly £15,000 extra in your pocket.

Our next article will cover the subject of builders. How to find and motivate a builder is an art that the successful property investors have mastered.

Andrew Stefanczyk has been investing in property for many years. He now runs a website for property investors at http://www.investalist.co.uk as well as advising new investors on how to become successful.