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Information > Property Due Dilligence
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Due Dilligence: n. Appropriate carefulness that a prudent person would exercise

Before you actually purchase a property, you need to quadruple check that it is a financially sound investment. It is no good falling in love with a chocolate box cottage if there is no rental market in the area or the rent will not cover the mortgage.


Many Vendors will also state that they think the property is worth an amount over market value so what looks like a 25% below market value deal, actually turns out to be only a 10% discount.
It is rather upsetting and a waste of money if the Surveyor values the property at less than you want and this part can make or break a deal.

It is important to check that the property will value to the amount you want and that you can get the rental required to cover all the outgoings and put some extra in your pocket.

It is highly recommended that you check what other similar properties in the same street or local area are on the market for. This can easily be done via internet sales sites and also Estate Agents local to the area.



You also need to check what local properties actually sold for as there will be a difference in the figures with the actual sale price being lower than the market price.

It may also be helpful to check house price trends to see whether an area is on the up or down and whether there is an approximate percentage difference between market prices and sold prices.

If you purchase a package or READY MADE DEAL, the due diligence should have been done and the figures will most likely be supplied to you.


You must however, do your own DUE DILIGENCE to ensure the figures quoted are correct.


Most READY MADE DEAL providers are reputable and will not intentionally miss lead but it is not unknown for the back end valuation to be inflated to make the deal stack. What looks like a 25% BMV deal may actually turn out not to be.




 

DUE DILIGENCE - You COULD AND SHOULD –

  • Check with Agents in the relevant area by telephoning them and asking their opinions
  • Check what is currently for sale on national property websites
  • Check how much property in the same road or immediate area actually sold for via the Land Registry or other websites offering the same information
  • Check the LHA rate with the Council
  • Check those national websites that have regional pages for properties for sale and to rent
  • Check for rental interest by placing a dummy rental advert on a free to advertise website and see what responses you get

 

 

 
 

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