There are some great properties out there just waiting to be found and the good news is the only tool you need to find them is Zoopla. Today we look at four underutilised filters that investors can use to find below market value property and motivated sellers in their chosen area.
How to Find a Below-Market-Value Property Using Zoopla
Are you looking for how to get started investing in property? Maybe you're a complete beginner and are starting from scratch. Maybe you are looking for your next great investment property to add to your property portfolio.
If so, I'm sure this video is gonna be great for you.
This is a free training video to show you how to find great value investment properties. They could be right on your doorstep or in your favourite area. They could be anywhere in the UK.
In this demonstration, I'll be using some free, simple tools to show you how to assess and analyse great value deals on the market, which other investors could be missing out on.
My name is Robert Jones and I run a property investment company called Property Investments UK.
We run a property investment course but we also have clients from across the world who we help find the best of UK property for them to invest in.
So, on a day-by-day basis, a lot of time is spent looking for the best property investment deals, using a number of different methods to achieve this.
What I've done here is condense a few of our methods to show you. These, and other techniques are in our training programme but I've decided to show these ones for free to find your properties.
It will cost you nothing to learn because all the tools I tend to use are free - for the tips and tactics I'm going to show you today, the tool I'll be using is Zoopla.
So, I'll jump from behind the camera to the computer screen and we'll begin!
Introduction To Zoopla
1/ Setting Up an Account
So, today, I'll be using Zoopla.
If you don't have an account already you will need to set one up. I recommend you do that before you start looking for properties as once you have an account you will be able to save the ones you find into a shortlist.
Setting up an account with Zoopla doesn't even take a few minutes. Head over to zoopla.co.uk now, click 'sign in', then 'register' and you're away.
2/ Location and Price Range
Once you have an account, the next step is to select a location and a price range. So, for this example, I will be looking at Manchester. Then I will set the price range to a minimum of £60,000 and a maximum of £150,000. I'm also going to select houses rather than any other property type.
Obviously, you can set this up any way you like. What I'm going to show you isn't specific to Manchester or my chosen price range. This will work for any location so, set these filters in any way you'd prefer.
As I'm looking at Manchester I won't need to add any extra locations or change my search radius in order to have enough properties returned on our searches. As we are looking at a city we are going to have plenty to play with just as it is.
3/ Date Filters
Setting up your date filters is a good thing to do here if you want to narrow down the returned listings to ones that are recent.
There's a couple of other search filters in here, that we haven't got time for today but we cover them in the advanced training that we offer, that I mentioned earlier, if you are interested.
4/ An Introduction to Filters on Zoopla
What I'm going to be showing you is this set of filters, here.
So, we'll be starting with the 'Most Reduced' filter - There are also 'New Homes', 'Shared Ownership' and 'Retirement Homes' which you can filter for but these aren't important right now.
There is also an 'Auctions' option which you can either leave in or take out depending on how you feel about buying property at auction.
Let's click 'Search' and that brings up 419 properties, which is great, but we are going to need to narrow this list down to the ones that have the best value or show signs that they are being sold by motivated sellers.
This process is called shortlisting which means simply, that we will be saving properties that we think fit our criteria into a shortlist.
As I mentioned earlier, in order to do this, you will need an account with Zoopla and be logged in.
So, these four filters four filters that we are going to look at are the 'Most Reduced' filter, the 'Most Popular' filter, the 'Most Recent' filter and the 'Map Function'.
We'll do them in this order so let's start off by looking at 'Most Reduced'.
The objective: We will be using the 'Most Reduced' filter to look for properties that have had a recent and significant reduction in price.
A recent, large price reduction can be a great sign that there might be a deal to be had where the property can be bought at below market value.
So, we've found a property, here. This house has had a price reduction of 18.9% in August. This is a recent drop in price and an 18.9% reduction is certainly on the large side.
A price reduction like this might mean that the property was originally overpriced. It could also mean that the homeowner's circumstances have changed and that they are now seeking a quick sale. In other words, we could be looking at what's known as a motivated seller.
When you are looking at houses that have seen recent price reductions it is extremely important to try and work out why a property might have had it's asking price reduced. For one thing, the more you know, the better your negotiating position but equally, if there is a problem with the property, the sooner you work out what that problem is, the better.
But, for now, we are just building up our shortlist and we can leave our more granular research and due diligence for later.
Furthermore, I know the average rental returns for this area, here, are good. The reduction is something we will want to think about later. But, this property certainly ticks a few boxes so, let's add to our list, click 'Save' and we're done.
Now, it's just a question of going through all these results, looking for our price reductions and seeing if any properties stand out and then adding them in as well until our list is a decent enough size to start working with.
What Kind of Price Reduction Should I Be Looking For?
How big a price reduction needs to be to pique your interest will depend, entirely, on the area you are searching in. What is true for London will probably not be true for Liverpool, Leeds, Birmingham or the Isle of Wight.
It depends on what the local market is like for a given area.
So, with that in mind, you will need to know something about the market conditions of the area you are examining. If it's a popular, buoyant area then it might be very rare to see reductions of 15% or even 10%. Likewise, in an area that is less buoyant, 15% reductions might more commonplace.
For an area like the one we are looking at here, which I know is quite buoyant I would set the criteria for adding properties to the shortlist at 10% or over. If I was looking at a more depressed area, I might want to set it to over 15%.
It depends entirely on the area, in which you are looking.
Filtering properties by 'Most Popular' is great for spotting properties that might have been missed by other investors and which aren't standing to people as they search Zoopla.
So, with that in mind, we are going to be using the 'Most Popular' search filter to find, not the most popular properties, but the least popular ones.
At the top, we have the properties that have been looked at the most in the last 30 days. As we go further down the list we can see the number of times properties have been viewed is reducing.
We have one here that's been looked at 2,900 times and then there is this one here, that's been viewed 1,700 times. So, that's quite a big difference.
So, we want to take this list, scroll all the way down to the bottom and look at it from bottom-to-top, back-to-front, if you will.
Going right down to the bottom of the list, we've got this property, here, that has only been viewed 18 times in the last 30 days. So, these properties at the bottom have had very little interest. They will be getting very few viewings and will probably have had no offers placed on them.
These properties could be great opportunities and just because they are at the bottom of the list doesn't necessarily mean that there is anything wrong with them.
But a lack of interest can be frustrating for someone, wanting to sell and because of that, you might find that the vendors are motivated, that they are more eager than would-be sellers of properties that have garnered more interest.
There could, of course, be good reasons why properties at the are at the bottom of the list and haven't been looked at by many people. This one, for instance, has only just been added and placed for sale.
It's important that you check when the property first came to market and you can check the date that a listing was added here, to the left of the screen.
If you start to shortlist properties that you can see have had little interest but which have only just been added then the interest in those properties could increase dramatically in a short space of time.
Then, the low-competition properties you thought you were adding to your list, could become high-competition properties, meaning that you lose your advantage.
If, however, the listing has been on the market for a couple of weeks and it's still not generating any interest then you should go ahead and add it to your shortlist.
Next up: We're going to look at the 'Most Recent' filter. What we are really looking for, here, are properties that have been on the market for a long time.
So, again, we are going to reverse this search and start looking from bottom-to-top.
This property, here, came onto the market in August, over a year ago. It's on for offers over £95,000 and it is a two-bedroom terrace.
Because it has been on the market for a long time, it can go into our shortlist. Any property that has been on the market for a while could turn out to be a fantastic deal.
But why are some properties getting so little interest from buyers compared to others?
Well, maybe things have changed. Maybe, they have not had a chance. Maybe they haven't considered reducing the price but would be open to a reduced offer?
So, any property that has been on the market for a long time could, potentially, mean that there is a seller that is motivated and that other investors have simply missed it, as an opportunity.
The fourth method for finding great investment property is using Zoopla's map.
So, using the 'Map Search' function, we are trying to find properties that are on the market at below market value.
They might have been undervalued by mistake or they might have been undervalued intentionally because the owner wants to sell quickly. And using 'Map Search' is the easiest way to spot these opportunities.
You can overlay the Heatmap tool and this will help you understand house prices in a given, local area.
So, here, we are going to go from low to high. Dark blue represents very low prices and dark red represents very high prices.
For this to be meaningful in your chosen location you will need to know the parameters of the market you are working in. So, you will need to know what yields you could expect in areas of medium-to-low value and what to expect from medium-to-high.
So, now we've found our area we can turn the Heatmap off and then we can start to look at the individual listings.
If there is a star next to one of the listings that just means that we've already saved it into our shortlist. Anything without a star we should examine further.
We want to go through the listings one-by-one and try and try and understand what the price ranges in a local area mean.
We've got a two-bedroom terrace here, on for offers of over £100,000, a two-bed here, for £130,000 and a three-bed here, also on for £130,000.
These properties are all close to each other and this one is obviously priced at a lower value than I would expect so that on is standing out as a potential opportunity.
It is as simple as that!
We are just looking for any outliers, properties that look lower priced than those in the surrounding area.
This one is a three-bed, offers over £95,000, so let's save that one because of another property, very similar and close by, is on for £110,000. So, again, that's a big difference. It's the same type of property, it could be in a very different condition, but it's on for what looks like a big discount.