If you want to maximise your profits from property you really need to be a bit of a geek – nothing too serious, but enough to make sure you don’t leave big sums of money on the table.
There are many areas where your geekery will pay you handsomely, but one to watch for is property prices and their movement over time.
PROPERTY GEEKS BASICS
Say you are planning to buy a property and you see a headline such as “UK house prices have fallen by 10% in the last year”.
This information is of limited value – it is referring to average prices in the UK as a whole. You are not going to buy in the UK in general, you are going to buy in a specific place.
If you are going to buy in London say, you want to know the London data.
But even that is not useful enough. London is a big place with over 8 million people and 32 boroughs and the City of London.
You want the stats for the borough where you are planning to buy.
But guess what, even that is not precise enough…
Look at the postcode data for your chosen location to acquire even more informative, helpful, insightful and lucrative information that can help you to increase your profits or gains.
You can find postcode data using Rightmove. Go to the Rightmove website and from the menu click on “House prices”; then click on “Market trends”. Type in the postcode of the area you want to search and press “START SEARCH”.
You will then find a wealth of highly useful information in the form of graphs under two headings:
- Sold properties
- Marketed properties.
You can filter or vary the information given under the graphs by time, type and number of bedrooms.
The other main property portals, especially Zoopla, also have the facility to provide you with detailed geekish information to best inform your decision making.
Also very useful for geekish excellence are the websites Mouseprice and StreetChecker.
THE PROFIT IS IN THE DETAIL
Here is how you can get the wrong impression if you rely on superficial stats and don’t dig deep.
In a report last year, the Office for National Statistics (ONS) reported that London house prices had fallen 0.7% in the year to June 2018.
If you had read that report and were offering on a property in London, you would no doubt be expecting a reduction calculated on the basis of that 0.7% reduction.
However the 0.7% figure was an average for London as a whole. In fact, in the year to June 2018 there were some parts of London which suffered price falls massively more than 0.7%:
City of London fell 23.8%
Kensington & Chelsea fell 13.9%
City of Westminster fell 12.1%.
If you bought in those parts of the capital and were happy with a 0.7% discount – or even double, treble or quadruple that percentage, you would have paid vastly too much.
Further, remember that this illustration is based on borough wide figures only.
If you were buying in Kensington & Chelsea say, a postcode search might have shown that the fall in your chosen postcode was in fact more than 13.9% (of course it could also have been less).
Remember also that data is usually out of date by the time it is published or comes to your attention. If so, you should make adjustments in your assessments and calculations.
Being a property geek costs time…but you are likely to be handsomely rewarded the deeper you dig into house price stats.
MUST KNOW PROPERTY STRATEGIES
Buy to let (buy and hold a property for income and/or capital growth)
Rent to buy (property is rented before it is bought)
Rent to rent (rent property to rent it on for a higher rent)
Seller finance (the seller helps a purchaser to buy)
Lender finance (a lender helps a purchaser to buy)
Do you have the mindset to become a property geek? Please leave your comments or observations below.
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Rebel Property Coach
My website is: www.rebelpropertycoach.com
Categories: 07 Next level