| To sell investment properties successfully in the current climate investors need to accept the new reality. Cash is in short supply. Many buyers who've invested over the last five years just don't have the stomach (or pockets) to buy at the current time. It's even more important than ever for investors to 'buy well'. |
But its not all doom and gloom. There other others investors who did not buy when the market was "hot", and only now are beginning to buy again. These are the people you need to find if you want to sell investment properties well.
Things can only get better?
As far as the financial climate is concerned - the pundits are giving us three futures. Either things won't get any better for a good while yet; it'll get a bit worse - a 5 to 10% drop in prices; or it will get much much worse - think another 25% drop in property prices. By all accounts then it's not ideal time to sell investment properties. But you can if you must. We can help you get the best possible price even if you think you already know how to sell investment property.
Oh, and by "investment properties" we do mean traditional properties rather than new builds.
So, if not to get out while the going is good - to get out before it gets worse. There is a sort of logic to that, but you'll need to square the circle in your own mind as regards the level of offer you can expect. This means accepting that anyone interested in buying investment properties is going to be more picky in general about what they buy and more pedantic on price. The investors who avoided buying at high prices are a hard bunch to please.
Where and how much
As recently as 2007, selling investment property meant you could possibly have achieved up to 85% of your investment's value. Today that seems ridiculous. Some investments can still command a premium, but you'd be more realistic to be thinking in terms of at least a twenty to twenty five percent discount for well maintained properties in good rental locations. Typically this means Edinburgh and West and East Lothian; London, Cardiff and Swansea; parts of the North West and West and South Yorkshire. There are exceptions outside of major centres where there is a shortage of rental properties - perhaps you already know you're on to a good thing - but many investors want to stick to the well-trodden-path.
How to sell investment properties quickly
If you are convinced now really is the right time to sell (we understand that you may have to) investment properties then you need two things.
A broker (like us) and detailed information about your properties. It makes life easier for everyone if you produce a detailed schedule of information. The more detail you can produce to begin with - the greater the extent to which your investment property can do the talking! If sellers don't prepare everyone gets very frustrated later on going backwards and forwards with lots of questions.
So. You need to prepare a schedule of information on a spreadsheet, detailing the basic details of your properties. This should include address, post code, number of bedrooms, current rent, whether vacant and details of major repairs/expenditure etc.
We are finding that investment property buyers are increasingly concerned about hidden liabilities - as well as cash flow. So the condition of your investments may be more important than you think and could well encourage an investor to offer that little bit more than you were expecting - especially if the properties are in a location they want to buy. Oh, and don't forget to include a column for redemption penalties because they can make or break a deal.
To sell investment properties not owned by a limited company or partnership its worth thinking about selling in clusters or batches. This can have an influence on the price you can expect. In a stagnant market less is more, as selling a thirty or a hundred properties at the time time limits your options to other companies or institutions. In the good old days just five years ago this would have been less important.
If you really can't bear to complete a column confirming how much you owe on each property it is helpful to provide details of a minimum about of equity in each property - this gives intermediaries acting on your behalf and potential buyers some indication of what is possible.
And a word about valuations.
While it is helpful to have details of current valuations, they can be problematic when provided by the same firm for multiple properties (say 20+) owned by the same person. In our experience these are nearly sometimes high-ish. So be prepared to have someone contest your figures. Knowing the source of the valuations (you, your agent, surveyor etc) is important.
Give some consideration also to confidentiality, the extent to which you want details of your properties released to third parties.
Serious sellers, need serious buyers
If you can sell investment properties yourself, do. But if you'd like assistance, it is worth asking if we can help. If you're serious about selling, you need a serious buyer. We can help you sell Edinburgh investment property or elsewhere (especially Cardiff, Swansea, London and Leeds or Sheffield).
To find out how we can help you sell investment properties call 0800 043 0669 or simply complete the form below.