The Below Market Value Property Secret
Category Advice
In order to make a profit out of your property, you need to focus on the purchase price, instead of the selling price. You can purchase property today in South Africa and see it rise by more than 6% the following year when you sell it once more to cover your costs. Another option is to buy the property at 20% below market value and this makes you ahead of the deal by the time the next transaction is due. There are certain aspects you need to look at before selling a property below the market value. These are: knowing where to look, whom to contact, what to look for and finally pitfalls to avoid.
You should know about the property market thoroughly before investing in below market value sales. While it might be a little surprising to see a property below its market value, the truth is these properties are highly in demand. They come to the market at all times, for a variety of reasons. A property may be repossessed by a bank who is totally insured for any kind of losses that are likely to be made on it. Hence, they are not concerned about the amount for which it is sold. This means you can purchase the property 10, 20 or even 30% below the market value.
The property might even be a component of a bigger disposal for a big organization and in such a situation, it is more important to sell it to the investors quickly, instead of getting total value in the market. This makes it possible for the properties to be picked at a considerable discount. You can even look for short sales of distressed property at the auctions. Once you proceed with the sales, you will be able to offer the buyer the property at genuinely discounted rates. Since the below market value property is a liquid asset, the property has no guaranteed buyer.
There is also no guaranteed seller, even when low rates are offered. In such a situation, the seller might sell below market value in order to evade chances of their home becoming a bank repossessed property, given the present rise in repossessions. A lot of owners who are not yet facing the effects of repossession also have to struggle with the mortgage payments. In such a situation, the home owners may decide to shift to a smaller property that has a lower mortgage. There might also be other kinds of debts like personal loans and credit cards which get out of hand. The bottom line is no owner wants their home to become a repossessed property.
In the case of surmounting bills, the home owner may be in a hurry to sell their homes fast so as to collect the cash for paying their debts off. In such a situation, a seller may be capable of buying back their property later when their financial situation has improved. One reason why people sell below market value is because the property is dilapidated and the owner neither has the time nor money to make repairs. They are likely to release the distressed property. These peoples’ homes are likely to become bank repossessed properties.
Author: IMAGINE Properties