Below are three ways in which you can buy property for a discounted price and potentially make a huge profit from them.
Auction properties
Attending a property auction is one of the easiest ways to get a cheap property but you do have to know what you’re doing. The last thing you want is to buy a severely run down property that costs a fortune to renovate and then won’t sell because it’s in the wrong location.
Before bidding on any property at an auction make sure you’ve viewed the property with a professional builder/electrician in tow. What seems like a decent property could be riddled with hidden problems and you need to know about them before buying. Saying this, if you do manage to find yourself a good auction property and you have the time spare to renovate it then you can easily double your investment money within a month or two. You will need to have a ‘mortgage in principal’ arranged on auction day though and a cash deposit ready to hand over.
BMV properties
BMV stands for Below Market Value and are the properties that owners are trying to sell in order to avoid repossession. This type of real estate investment is beneficial to you in several ways because not only do you get a good property for a greatly reduced price, you also get reliable tenants from the off in the form of the owners. Occasionally the owners won’t want to rent the property back from you, in which case you can either rent it to new tenants or sell it on for a decent profit.
In order to buy BMV properties you do need to be able to arrange mortgages quickly and so you will need a substantial amount of cash to use as a deposit. Once you start making a profit from real estate though you can look at buying this type of property outright without the need for a mortgage.
Off-plan properties
Off-plan properties are properties that are still in the planning stage when you agree to buy them i.e. they haven’t actually been built. You simply choose the plot you want from the plans, pay a reservation fee of around £1000, sign a contract to say you will buy the property when it is complete and pay between 5% and 10% of the purchase price in the form of a deposit when the contracts are ready.
If you choose your development wisely you can often make a profit simply by selling the property as soon as it is completed, as its value will increase during the year or two that the development is being built. Alternatively you can rent your property out and make money each month from the rental income.
Obviously there are risks associated with all three of these real estate investment options but if you take the time to research what you’re buying then there is no reason why you can’t make money from real estate.
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