Why Not All Investment Property for Sale is a Good Deal

Is it true that property investing is a great way to earn high profit margins and residual income? Absolutely. But does every investment property for sale qualify as a good deal? Absolutely not.

Like any other type of investment, there are both good and bad deals on property. The best investors will learn how to identify both kinds, so they can take advantage of the good and walk away from the bad.

How do you tell a good deal from a bad one? Consider the following:

  • Purchase Price - The best investors in property know there is value in bargain pricing. That's why they look at properties listed at below market value. The better price you can find, the greater your overall yield throughout the life of your investment. Analysts suggest you set a goal of paying no more than 10 times the value of annual rental income on any property.
  • Quality of Properties - It goes without saying that most investment properties for sale will need at least some amount of repair and restoration. That's a normal part of this type of investing. However, be sure you are comfortable with the quality of any property before you purchase. Sometimes renovations and repairs can be costly enough to significantly reduce your return on investment.
  • Hidden Problems - You may find a property described with phrases like, ‘an interesting home in need of some tender care’. What the listing may not tell you is that the ‘tender care’ includes repairing crumbling brickwork or replacing all the roof tiles. Such hidden problems can easily transform a good deal into a money pit. Hidden problems may also include legal issues surrounding taxes or liens.
  • Neighbourhood Quality - Investment property for sale is all about finding quality tenants willing to let from you. So what are the types of tenants you are looking for? If you purchase a property in an area that's not family-friendly, yet you still intend to try to attract families, you are probably wasting your time. That purchase ends up being a bad deal if you cannot attract the right kind of tenant.
  • Rental Rates - Property investors typically seek to establish rental rates that will yield a certain amount of profit with every passing month. Let's just say, for sake of argument, an investor wants to pocket 10% after accounting for all monthly expenses. But what if rental values are not that high for a given area? What seemed like a great deal on investment property for sale may prove otherwise if the property is unable to bring in the rent you are looking to get.

Fortunately, finding the best deals is not a matter of chance or good luck. It is a matter of knowing what to look for and how much to pay for it. That's where Fruitful Property becomes a valuable partner to your business. We've been providing our clients with great opportunities for more than 30 years.

What's more, Fruitful Property invests tens of thousands of pounds every month in property research. Rest assured that when you use us as your agent, we would not be presenting you with bad deals. With us, you get only the best deals available.

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Jonathan Caplan

by Jonathan Caplan - Property developer, investor and Fruitful founding Director.

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