dothesums blog

Link: http://www.dothesums.co.uk/blog

We have long been advising our investor-customers that the key window of opportunity to make long term profit is, when the property is bought.

This is equally true for the residential buyer. We accept that buying a house is primarily that of buying a home. Once that has been accepted then getting the best financial deal is key; but this does not necessarily mean buying the cheapest. Buying for VALUE in the long term, produces financial reward. This will depend to a large extent on the value growth patterns in the selected locations.

We list below our top tips for investors, some of which will apply to residential buyers.

Top Tips:

1. Money is made when the property is bought.

2. Buy, if possible, from a motivated seller.

3. Cherish the DEAL, not the property.

4. When negotiating, never be the first to name a figure.

5. Do not follow the herd. There’s no harm in going against the grain!

6. Buy with little down; use the power of loans to increase the return on your capital.

7. Think and act long term - sell infrequently.

8. Note that ‘the deal of the decade’, comes about once a week.

9. Look at the details of 100 properties, to view 10, to try to finance three and end up buying one.

10. If possible, accelerate loan payments.

One of the best things about property in more normal times, is that it exists in an imperfect market. There are no absolute determinants of value. Personal circumstances, market conditions and individual skill and expertise have a significant effect on the price and terms with which you can acquire a property.

Even professional valuers can only claim plus or minus ten per cent accuracy; that is, a twenty per cent variation. In truth, the value of a property is the amount for which a buyer is prepared to pay a stated price.

Value does not exist independently of the owner’s context. This still makes property one of the best ways to acquire long term wealth, whilst enjoying a well chosen home.