BMV - does it exist?

A subject that pops up with increasing regularity is that of Below Market Value (BMV) properties. There are a number of national companies that promote the idea of BMV, and usually tie it in with the idea that because the property is BMV, the purchaser can somehow acquire the property by putting down little, if any, deposit.

I've always been suspicious of these deals on the basis that if I owned a property, I wouldn't sell it for 25% less than it was worth - and the research I've done on the whole concept only re-enforces this view. Clearly I can't comment on market values in Wigan or Rotherham, but I've been offered a couple of supposed BMV deals in Northampton where I'm being told that the true market value of a property is £120,000, when I know full well that in reality it should be less than £100,000.

It seems that the Advertising Standards Agency are similarly sceptical : http://bit.ly/AaSdkh.

This rather supports the idea that if something sounds too good to be true, it very probably is. Yes, you get the odd vendor who is prepared to let his or her property go at a preferential rate because their personal circumstances mean they want a quick sale. But 25% is a bit optimistic. Even repossessed properties are selling for within about 15% of the market rate at the moment, and many of these are in a state of disrepair. Builder part exchanges trade at a similar 15% discount, and yet investors still seem taken in by perceived BMV offers offering in the region of 25%. My advice is quite simple - do your own research. There's such an abundance of property related information freely available on the internet these days that people can assess the true value of a property for themselves without doing too much legwork. It makes sense to do this, and to question the deal that's being put in front of you rather than buy something now that you regret later. 

NOW SOLD Buy PRE TENANTED - a 6% yield, and a nice property

This is a property we manage already - great tenant that pays £675PCM - so you can pick the property up with rental income from day 1. It's nice property, decent area, very lettable, and in good order. Is always popular when it comes to finding a tenant. The current owner is looking for around £135k for the property.

This will appeal to landlords who want a nice area - somewhere you'd live yourself. Contact me at richard.baker@belvoirnorthampton.co.uk if interested.

NOW SOLD Staple Rental Property with 12m rental guarantee

This property is advertised at the market rate (it's not Below Market Value), but is a staple rental property that has been pretty much constantly tenanted @ £575PCM for the 5 years we've had it on our books. It is sold with the current tenant in situ, and with a 12 month rental guarantee at £575PCM from ourselves, giving a yield of 6.7%. A very safe bet for a risk averse investor who doesn't want a property that requires a maintenance spend.

Purchase price of £105,000. It is a 2 bed ground floor apartment in Kingsley, built in 2004, and in good condition internally.

NOW SOLD Total Refit Required - £78k cash purchase

For someone who doesn't mind work, this property presents an opportunity to secure a Victorian terrace for below the market rate. Buy this property 'done' and it would cost you about £110k. Buy it in the run down state it is, and do it up, and you should come in at much less than £110k. As such there's a deal there for someone who 1) has cash and 2) isn't scared of a bit of work.

This is a 3 bed Victorian terrace with downstairs bathroom in the Mounts. A staple rental property, it will achieve £575 when done, as it will be in immaculate order. It does however need pretty much everything doing including re-plaster, windows, kitchen, bathroom, re-wire, central heating etc. Expect to spend £20k unless you're 'in the trade' and able to get this discounted. It's perfectly achievable - our maintenance team will give a fixed quote if required - as such you can subcontract the work if you prefer.

We suspect this house isn't mortgageable as it doesn't currently have a kitchen!

Interested parties please get in touch - we understand the property can be purchased for around the £78k mark. As such it will work well to keep as a rental property, but not quite well enough to buy, repair, and sell.

Gremlins in older properties

Saw this article today, which is very true! http://bit.ly/yiL5g0.
When buying an investment property, don't underestimate what needs doing to get it ready for a tenant. Often this is a lot more than a lick of paint. I've seen many landlords get caught out by this. You need to get the property in good order to attract a decent tenant - a patchwork property will only attract a patchwork tenant.

7.2% yield - 1 bed House - Northampton

The latest of a regular stream of investment opportunities - 2012 has started well for investors looking for deals!

This is a 1 bed house, very rentable, and close to the Weston Favell Centre in Northampton. We understand a price of £75,000 may be achievable on this FREEHOLD property. Although it rents for slightly higher currently, we feel a realistic rental valuation for this property is £450PCM, giving a yield of just over 7%.

Viewings are already taking place. Let me know quickly if you're interested - properties on this blog are selling within an average of 48 hours currently!