Where do you start, when trying to find Below Market Value (BMV) properties?
One of the best tools to use is `Zoopla.’
This will enable you to find BMV property and motivated sellers in your own chosen area.
Whether you are at the start of your property journey or looking for your next investment property, Zoopla will help.
Once you have opened a Zoopla account (for free), you can start to set the filters to your required specifications.
For example, a minimum price range of £40,000 and a maximum of £120,000 for houses (in the north of England).
Obviously, you will get more available properties in a city than a small town.
Setting up your day filters is a good thing to do here if you want to narrow down the returned listings to ones that are recent.
There are also a couple of other search tools in here as well.
Start off with the `Most Reduced` filter. There are other filters here which can be ignored.
The initial search will bring up dozens of properties which is good, but you need to narrow this list down to the ones that have the best value or show signs of having motivated sellers.
You can then save the relevant properties into a shortlist.
MOST REDUCED FILTER
This is an important filter.
A recent large price reduction is obviously a great sign that there could be a deal to be had.
For example, if a house has had a large price reduction of say 16% within the last couple of months, then that will definitely be put on your shortlist.
The property might have been overpriced, originally.
Or it could mean that the vendor`s circumstances have changed and they are now seeking a quick sale (in other words, a motivated seller).
It is important to try and work out why a property might have had a price reduction.
If the rental income for the area is good, you can expect good returns.
Then just go through the results, seeing if any properties stand out and adding them as well.
It will depend on what the local market is like for a given area.
So, it is important to be familiar with the market conditions of the area you are searching in.
If it is a popular, buoyant area then it might be very rare to see reductions of 15% or 10%.
In a situation like this, we could set our criteria for anything over 10%.
In another situation, you might want to set it to over 15%.
It depends on the area.
MOST POPULAR FILTER
This filter is great for spotting properties that might have been missed by other investors and which aren’t standing out in the majority of searches.
At the top, are the properties that have been looked at the most in the last 30 days. As you go down the list you can see the number of times the properties have been viewed is reducing.
For example, a property could have been looked at 2,900 times and another viewed 1,700 times. So, that is quite a big difference. Therefore, you need to take this list and scroll all the way down to the bottom and start to look at it back to front.
Right down at the bottom, you will find property that has only been viewed 20 times in the last 30 days, so these properties have had very little interest, will be getting very few viewings and probably no offers.
Now, these properties could be great opportunities and because of the lack of interest in them, you might find that the vendors are very motivated.
There could, of course, be a good reason why these properties have not had many views. For instance, this listing has only just been added. So, it is important that you check when the property first came to market.
MOST RECENT FILTER
This next filter confirms how long a property has been on the market. You need to look for properties that have been on the market for a long time.
Again, you need to look at the bottom of the list.
Because it has been on the market for a long time that can go into your shortlist. But really, any property that has been on the market for a while could turn out to be a fantastic deal.
But why are some properties getting so little interest from other buyers?
Well, maybe things have changed. Maybe, they have not had a chance. Maybe, they have not considered reducing the price but would be open to a reduced offer?
So, any property that has been on the market for a long time could potentially mean that there is a motivated seller and certainly could be a great deal that everyone else is missing.
MAP SEARCH FILTER
So, using this function, you are trying to find properties that might have been undervalued. They might have been undervalued by mistake or they might have been undervalued intentionally because the owner wants to sell quickly.
The `Map Search` is the easiest way to spot these opportunities. You can overlay the Heat Map tool and this will help you understand the house prices in a given, local area.
Going from low to high, dark blue are very low prices and dark red are very high prices. So, if in your location, you know you need a particular yield and that yield is only going to be achieved in areas of medium to a low value then you will be able to identify where you need to be looking, using the Heat Map.
If there is a star on one of them, that means it has already been saved into your shortlist. Anything without a star you should have a look at.
You need to go through the listings one by one and try and work out and understand what the price ranges in a local area are and what they mean.
For example, if there are three similar properties close to each other and one is at a much lower value than the other two, then that could be standing out as a potential opportunity.
It is as simple as that!
You are just looking for any outliers, properties that look lower priced than those in the surrounding area.
Property Deal Store Director