Below Market Value (BMV) Property Investment - so what's it all about?
Below market value property investing isn't new, far from it, in fact it has been around for many years, however BMV is a rapidly growing sector of the property investment world. Now, everyone has heard of purchasing a new flat or house where the developer has given a discount incentive, maybe even paid some or all of the deposit. By being offered these 'discounts' investors have been led to believe that they are purchasing the property BMV, when in fact they haven't at all. This strategy worked in a rising property market, with relative ease of access to property finance, but not now. This is where true below market value property investment comes in to play.
The savvy professional property investors have been buying property by obtaining genuine discounts against the true property value, the open market value (OMV). Establishing the true open market value of a property is a whole different subject for discussion, but for the ease of explanation, and from the viewpoint of the geared property investor, the open market value is the value which a mortgage lender is prepared to accept for them to secure a mortgage against - usually quantified by a RICs qualified surveyor.
Why would people want to accept less for their property than they can achieve on the open market - answer; many reasons. Understanding these reasons why homeowners are willing to accept a true BMV offer for their property is one element (of many) of the science of below market value property investing.
The basics - reasons why homeowners accept BMV offers
Achieving the highest selling price is likely to be most people's main priority when selling their home, however speed and convenience are two of the biggest factors affecting why someone would be willing to consider a discounted offer for their property. Therefore their motivation to sell will play a major part, as this is where speed and convenience become a higher priority for the vendor. These are commonly referred to as 'motivated sellers'.
Motivated sellers are affected by various factors ranging from; time, emotional, and financial pressures, all of which need to be understood, in order to be able to offer a viable solution for their individual situation.
What next?
Hopefully by giving that very simple introduction into BMV property investment, you will now understand that this is a huge subject and one which should be thoroughly researched and investigated. Whether you are interested in taking your first steps into below market value property investment, or alternatively looking to develop more advanced BMV investment techniques through further education, then BelowMarketValue.co.uk is design to give you a centralised online resource for everything BMV.
