Grow your property portfolio faster and with more confidence by learning about these five valuable skills. Today we look at how you can find the right people for your team, value a property with greater accuracy, find those buyers who need to sell quickly, negotiate like a pro with a vendor or estate agent and develop the right strategies for making sure that any property you own stays profitable.
Today we’re going to be looking at 5 powerful ideas that every property investor should know – 5 things that are going to help you grow your property portfolio fast.
1. Property Networking Events
So the first one is property networking.
For some people, networking can be quite difficult, initially. A lot of people are just not the type that is going to really enjoy going out to events and networking with other property investors and developers.
I know I certainly wasn’t when I first started going to property networking events. But it was really worth doing and I fully recommend you try.
Property networking will give you some fantastic experiences, not-to-mention contacts that are really going to help you in your property career.
Property Networking Events: Types
These days there are lots of different property networking events all across the UK.
There are branded events that tend to provide a platform for some idea or strategy. There could be training involved as well.
Then there are more independent events where that are not as sales orientated, with everything more focused around the connections that can be built within the group.
I’d recommend you try both… You’ll want to see what kind of property networking event is the right fit for you.
If you are short on time, however, I’d suggest that you stick to attending the independent events to start with. They can be great for getting a few local contacts and really, that’s exactly what you are going to need.
How I’ve Benefited From Networking
When I first started in property the main benefit I got from attending property networking events was that I made a few connections that became key to my business.
These are people that I work with to this day…
It was through contacts that I met at networking events that I found the refurbishment teams that Property Investments UK is still working with. I’ve found fantastic trades people as a result of recommendations from the industry experts that I’ve met at these events.
In truth, I met all the lettings agents that manage our properties at these events – agents that we continue to use, who have continued to deliver on the properties we pass to them.
From finding tenants to property management the lettings agents I have used have helped me no end, run my property portfolio. And I met them all at property networking events.
But it’s not just letting agents – there are mortgage brokers, solicitors. All kinds of contacts that you will meet that could form the foundations, the cornerstones of your property portfolio.
The very kinds of people that could form the bedrock of your property investment business.
Summing Up: Property Networking
As a property investor, you should be going to networking events. Yes, you might be out of your comfort zone, initially. But, the chances are, you are going to meet exactly the right people to help you accelerate your growth.
2. REALLY Learning How To Value A Property
The second thing to consider is to make sure you know how to value property.
If you are just starting our in property it can be hard to know what to look for. It can be difficult to know how to compare one property with another.
But once you have a little bit of experience in this regard – when you are comfortable with doing this – then growing your portfolio is going to be a lot easier and a lot more profitable.
This is because making accurate valuations is the key to getting better deals.
When I first started out buying property there was a house which I bought for probably about 10k pounds over value.
This happened because I didn’t understand how negotiation worked. I didn’t understand how estate agents worked. I had no way of working out what offer I should have put forward to the seller.
You learn these things from talking to other investors, with landlords, letting agents, estate agents…
You learn these things from getting involved in the process and if you haven’t got that experience you need to speak to as many people as possible.
Other People’s Experience
When it comes to valuing property the single biggest advantage you can have over others is going to be your ability to leverage other people’s experience.
If you are focusing on a key area then you want to speak to others who invest, work in that niche.
If you are looking at a 3 bedroom terraced house, or a semi-detached, a bedroom apartment (whatever it might be) then speaking to other investors will give you a better idea as to what the price parameters should be, than if you tried to work out the numbers on your own.
Of course it shouldn’t stop there.
You should never try and value a property just on advice and should always practice your own due diligence.
You need to carefully examine elements such as comparable sale prices. That is to say, you want to be looking at other, similar, properties on the market and at what they are selling for.
You want to be looking at how quickly other comparable properties are selling in the same area.
It is factors such as these that will really help you understand how an on-market property should be valued.
Once you have some requisite valuation skills under your belt you are going to be able to spot an undervalued or overvalued house on the market and that is going to give you a serious edge as an investor.
Property Valuation Is Not An Exact Science
There is always property that is being sold, either through an estate agent, or at auction, that has been either overvalues or undervalued.
As an investor your job is to spot opportunity.
If you understand how to value a property then, as your portfolio grows, it will be a lot more profitable.
3. Motivated Sellers
Next up is understanding how to spot the motivated sellers.
This aspect of spotting a deal can be undervalued by a lot of investors. A lot of buyers assume that just because a property is on the market the seller is keen to sell.
This isn’t always true – or at least some sellers are more keen to sell than others.
You should always try and understand why a property is being sold. And from there ask yourself how motivated the seller is to sell.
There’s Always A Reason To Sell a Property
Whatever the property – be it a semi-detached, a commercial development, a one bedroom flat – there is always a reason why someone wants to sell.
The truth is that the reason might be something that should put you off buying.
There might be a problem with the neighbours. There might be a problem with the neighbourhood. There might be some development that is happening close at hand that is going to change the area.
If there is you want to know about it…
Every seller has some motivation that lies behind their decision to sell. That is why the property is being advertised on the market. It’s important, as best you can, to understand what that motivation is.
But what you really want to focus on is not vendors that want to sell but on vendors that NEED to sell.
These will be people that perhaps have a predefined time-frame in which they want to sell that property. It might be a couple of weeks, a month, a couple of months – whatever it might be, they have a date in mind.
It might be some kind of life event that is forcing their hand. Maybe it’s because they are relocating. Maybe they have found a new job or lost their old one. The house might be on the market because of probate. When a property has been left in a will to a family member or a friend sometimes that person will want to sell that property quickly – because they have an attachment to it or because of family memories that they associate with it.
Properties with motivated sellers will all eventually sell for a price that works for the buyer and the seller alike. The only real difference is that the seller has a need to sell rather than just wanting to sell.
So, I recommend that firstly, you try to always understand why a property is on the market and secondly try and target those properties where the vendors have a specific and pressing need to sell.
The Quick Sale and Other Benefits
As an investor it is with these kind of properties that you can add most value to the deal.
For instance, if the vendor needs a quick sale and you are buying with cash then you can offer a quick sale. This, of course, would be very beneficial to them.
So because you are not a traditional home buyer – and therefore not in a chain and not needing to sell your own house – and you have your finances ready, you are in a positional to offer all kinds of things to the vendor that others would be unable to offer. If you can bring these elements into the deal then it can be a win/win for everybody.
But, in order to do all this, you first need to understand the vendor’s motivation for selling and be dealing with a vendor that has a pressing need to sell – that is to say a motivated seller.
4. Understanding the Art of Negotiation
Number 4 is making sure that you really understand how to negotiate a property deal.
Negotiation Is Key
It’s important to bear this mind when you are speaking directly to a vendor or homeowner. And it’s very important to bear in mind when you’re speaking via or to the estate agent, who is acting as a third party in the deal.
Negotiation is about a lot more than just understanding how to value a property or knowing why the vendor has put the property on the market.
Negotiation is about bringing all these elements together and then trying to get as much value in that deal as possible. The fact is that when investing in property, you are going to make the majority of your money when you buy.
You can’t turn back time. You can’t change a deal once you’ve completed it. You want to make sure that you never overpay on a property.
If you can, you want to lock in as much equity in the initial stages when you buy a property. Having value in the deal is going to help you in the long run by giving you more opportunities for an exit strategy.
Negotiating hard on a deal is important, especially when you consider the property’s value.
Because if you are negotiating, let’s say a 5% discount on a £100,000 property, it might not sound like a lot, but it’s £5,000.
Think of the other things you might negotiate on like a car or a holiday. Investing in property is a lot more expensive than nearly anything else that you could buy. As such, negotiation is vital. Even a few percent can save you thousands of pounds.
The art of negotiation is something that we go into a great deal of depth on in our VIP Property Training Course. This is because it is so important.
But, I can give you a few tips here.
Tips For Negotiating Property Deals
When you are speaking to an estate agent you need to try and understand exactly where they’re coming from. They work on behalf of the seller so they’re going to try and get the seller the best possible price.
Of course, you, the investor, wants to buy the property at the best possible price for yourself.
The trick to the negotiation is going to be to get as much information as possible. You want to value the property correctly and you want to understand the vendor’s reason for selling.
Getting this information starts at the viewing stages and a lot of it will come from the estate agent. With that in mind when you speak to the agent you want to be asking questions that will give you as much information as possible.
Be As Detailed As Possible
So you start by outlining your position (the benefits of your offer). So tell them if you’re a cash buyer or in a position to purchase the property quickly. Tell them if you have everything in place – your solicitors, your mortgage, whatever you have got. When you put an offer forward you want to be bringing all the advantages your offer has to the table.
So the first tip is to always be as detailed as possible when talking to an estate agent.
When you negotiate with an estate agent you need to outline exactly what your offer includes.
You don’t just want to offer a price for the property but also the benefits that you can bring to the deal. You also want to give the reasons as to why you are offering that price. This might involve supplying your local comparison research or perhaps the costs involved in the refurbishment.
It’s important to break down your reasoning when you speak to the agent. Doing this you is going to put you in a stronger negotiating position.
Don’t Use Round Numbers
Another good thing to be doing is to never put an offer in using simple round numbers.
If you are thinking of buying a house that is on the market for 110,000 and you go in with an offer of 100,000, your offer is going to be easy to dismiss, as it will look like you haven’t thought about it very much.
Using a round number will make it look like you’re just throwing it out there. If a vendor gets the idea that that is what you have done then they may well just reject your offer out of hand.
On the other hand, if your offer is for 101,000 or 99,000 people will assume that there has been a little more thought put into it and will naturally treat it with more seriousness.
The Initial Offer
Remember that most often vendors are going to reject your initial offer. That is unless it’s fantastic and exactly what they are looking for.
They’ll reject it in order to try and get you to offer higher. Estate agents are taught to do this.
It is because of this that it’s important that you learn how to present the offer. Detail, remember. The more you give them the harder they will have to think about why they are rejecting the offer.
This alone is going to give you the edge.
5. Know Your Strategy
Finally, the fifth tip is to have a strategy for the property you are interested in buying. This, of course, shouldn’t be one idea as to what you are going to do but a strategy that involves an A plan, a B and a C.
So more often than not an investor might go to a property and think, “ok, this could work as a buy to let or an HMO”.
This isn’t really enough.
It’s great to have a clear idea as to how you want to approach a property investment but you need to have a fallback plan.
If plan A, for whatever reason, doesn’t work you need to have a plan B and a plan C that will still make the property work without you having to sell it or exit the project earlier than you first anticipated.
Having to leave a project by selling it is going to drastically affect your bottom line. As we talked about before needing to sell a property can seriously affect the amount you are able to sell it for.
Because you don’t want to become a motivated seller yourself.
It’s important to have some ideas about extra ways for the property to make money if your original idea falls through and sometimes it’s important to think outside the box.
You need some backup strategies. That’s why we look at 9 different strategies in our training course. That’s 9 different ways for a property to generate income.
These are 9 different approaches to investing in property that will help you to look at a property and come up with a plan A, B and C.
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