dothesums blog

It is a key fact that all good investment decisions start with a competitive purchase price.

Profit tends to be made at purchase.

Therefore, an estimate of the true market price at the time of purchase is essential.

The property really should be seen and compared with similar properties in the local press and estate agents, for both price and rental value. Most letting agents will give an estimate of the local tenant requirements and the likely demand at any given rental value. They generally are helpful because you may become one of their valued clients.

This appraisal should be independent of the seller and preferably double checked by the buyer’s own valuer, not just estimated by the seller’s agent.
A second check should be made using one of the many on-line sources of recent prices, based on the Land Registry data.

This approach seems elementary and yet investment properties are still being bought on data supplied by the seller’s agent (see Guardian-on-line article dated 22.03.08 by Tony Levene).