Cheap property doesn’t always make a profit for an investor. The question we should actually be asking is: ‘How do I find properties that are being sold at substantially less than market value?’.
The first step is to find an area where future demand will be greater than the supply. How? Find out where there is to be new rail and road links. A large company moving to an area will bring jobs. People will need to move to the area to fill the vacancies and the demand for suitable housing will grow. Many large cities now have plans for area regeneration. Buying in the areas will cost a lot more when regeneration has been completed.
The next step is to decide on what type of cheap property to buy. If the demographics show a lot of elderly people living in your chosen area, then perhaps single storey accommodation will be in demand. If there are a lot of young people then perhaps the demand will be for apartments.
Once you have decided on both the area and type of property, you need to compile a list of what’s available. This can be done by using online resources such as www.findaproperty.co.uk . Other sites such as www.investalist.co.uk specialise in cheap property for refurbishment or development so may cut out some of the work for you.
When you have a good idea of what is available, you will need to see what the average property is costing in your chosen area. A great resource for this is www.upmystreet.com . They will also have a lot of other information such as the locality of schools and shops.
Finally you will need to visit the area yourself. Make a shortlist of properties to go and view. Take a pencil and paper so that you can write down the telephone numbers of agents from their For Sale boards. This is an excellent way of finding out if it really is a cheap property as well as supply and demand issues. The agents are generally only too pleased to help if they think they may be getting some business.
Finally nobody, especially property investors ever pay the asking price. You will need to put in an offer. This is an art in itself and will be the subject of a future article from us.