Buy Properties Below Market Value

When many people hear the term ‘property investment’ they automatically think of what they have read in the papers: falling house prices, fluctuating interest rates and the failing economy.They see this press. Take it to its word. And forget that hidden beneath its outer exterior the property investment market has got a lot to offer. It is not inaccessible either. All it takes to access the true potential of the property market is the knowledge to know where to look and ‘know how’ to make it happen.  Remember, despite all the hype, property is still an investment vehicle. A vehicle that gives investors – we mean you – the flexibility to control your involvement and how much time you invest within them.Take a look at stocks. Do you really understand how they work? Not many of us do, but we still invest in them because we know there is profit.But imagine what you could achieve with an investment that you could completely control? No worries. No fear. But knowing exactly where you.Well with property you can. Your choices will be endless.Real Estate Stocks and Mortgage instrumentsNow if you wanted to be a passive investor this is the route to take. Here you can place funds into the stock market in the form of equities of major national homebuilder firms, and they will do the rest for you.Or alternatively you can follow another investment strategy: discounted notes.The rules to this investment are simple.  Sellers quite often are quite happy to accept a mortgage from a buyer to begin with but later want to convert it to cash. To do this they need to sell the note to an investor – you – at a discount. And the rest? Well. Whilst they are free of the mortgage, you will be receiving monthly repayments from the buyer – when you have never even seen the house. How simple is that?Appreciation of property valuesThis one is the more traditional routes and one we’d most recommend if you plan to sell your properties later on.Take the current financial climate. You can now invest in properties at 70-80% of their original value without a second thought. Giving you instant free equity.Now consider this. After investing you decide to either rent your property out or live in it yourself. Over time, your property investment will begin to appreciate in value, and if it is anything like what we have experienced before, you will have access to a property that is greater in value than the top properties of 2007.And if you do eventually sell, you will not only experience a return on your investment… you’ll have that initial extra equity to boot too.General Price inflation in the economyEven if your properties are not appreciating in value – as properties are doing now – this is not the end of your property investment. No. Their value can also be affected by economic inflation.So let’s just say for example that you are developing some properties. If the cost of labour and materials is continually rising, then the cost to build an identical property could be more than the original. And if each property you build in one area is costing a bit more each time, then in turn their value as a complete development site will have risen.Meaning at the end your property values will be higher than they were to begin with.Cash flow and mortgage repaymentsCompared to traditional investments that require some money on your part to maintain and pay for them, with rental properties you don’t have to deal with that. Your tenants will essentially pay your repayments for you, whilst giving you an additional positive cash flow each and every month too.With figures like these it is easy to see why property is considered a stronger investment than stocks and a bank account – the gains are much more profitable.And here is the best part. Even if your rental income covers only the mortgage repayments. No more. No less. You will still have the joy of watching the equity in your property grow over time.Buying below market valueLook in the papers and you’ll read many reports of investors who are selling up in the current financial climate in order to maintain their profits. This is a big mistake on their part, but one you can take advantage of. You see they will be so keen to access the equity from it, they will be happy to sell it to you for below value. Great!Then there are other cases when a property has gone into a foreclosure. To sell the property and get their money back, lenders will often take less than the market value so that they can avoid any further marketing expense and begin again with a clear slate.Now here is the advice you have been waiting for… Find one of these properties and you will immediately enter into an equity position, purely based on profits.So if you do spot one… gets investing and buys low. The long terms profits will be incredible.Converting the use of your propertyImagine investing in a run down 5 bed property and being able to convert it into student accommodation or 2 apartments. You could potentially increase your rental income and benefit from having multiple tenants all within one property. Meaning there will always be someone living in your rental property.This is what is so great about property investment. You can do a similar thing to any type of property. Take for example this concept. You have just invested in some apartments that currently have low rental yields.With a little remodelling, you can convert these said apartments into condominiums, and nearly double your rental yields.Create new valueEvery region or neighbourhood goes through a price fluctuation at some point. So spotting a potential hot spot – before its property prices have increased – can be quite profitable.In this one area you can build up your property portfolio and sit back and watch as your properties appreciate in value. Perfect!Get the picture – property investment can offer you consistent ‘positive’ cash flows every single month, plus can come in all shapes and forms for you to choose from.So if you are looking to invest in rental properties consider your options for a moment. There is more to property investment than meets the eye.