A wise man once said….”It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” That wise man was Warren Buffett, and if anyone can give investment advice, he can. The same principle applies to buying property, a quality property.
Many of our clients come to us initially expecting to be able to buy a bargain. Don’t get us wrong, we are always on the hunt for bargains but often what may appear to be a great deal on the surface actually turns out to be a lemon. These properties are likely to cost you much more money in the long term: they are cheap for a reason and you run the risk of having a long term poor performer on your hands. Either that, or you will need to spend money rectifying that was wrong with the property in the first place for it to be a “bargain”.
If a property seems inexpensive in comparison to other real estate in the area, there is probably something very wrong with it. Whether it be the location, fundamental building problems, bad aspect or simply a poor design, these “wrongs” will ultimately compromise capital growth and rental return.
That’s not to say we don’t uncover the odd bargain, but these are usually available only with a small window of opportunity and as a result of a suddenly forced sale, or a poorly handled sales campaign, perhaps an initially unrealistic vendor who missed their opportunity to maximise their price or simply terrible presentation for sale.
Basically, you need to be in the right place at the right time to take advantage of one of these situations. We see people miss out on these great opportunities simply because they weren’t ready to make a decision.
Those buyers who focus their attention solely on “bargains” often don’t even notice great properties that may be available at a fair price. And in the end, this focus on the poor quality end of the market will probably cost them a lot more than what they “save” on the purchase price.
Published:- 23 May 2016
Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.