Property Investment
Your Questions Answered
Wednesday 8th of September 2010
click to read todays newsletter

Property Investment Latest Tips
Your Questions Answered - FAQ's

What does BMV mean?

Below market value.

How do I know a property is genuinely BMV?

When the investment property can be bought below RICS valuation.

What does RICS mean?

Royal Institute Of Chartered Surveyors.

How does this differ from other valuations?

An estate agent, vendor, investment company etc., valuation is simply an opinion and will not be taken into account by a lender.

What does a RICS surveyor do?

Values a property for mortgage purposes.

Who instructs the RICS valuation?

The lender who grants you the buy to let mortgage.

Why does the lender require a RICS valuation?

To independently establish the current market valuation.

How is the valuation used?

To determine how much the lender will advance as a mortgage.

How is the mortgage amount calculated?

The lender will advance a % of the RICS valuation depending on the LTV of the mortgage product you choose.

What does LTV mean?

Loan to value.

How much would this actually be?

If a RICS valuation is £100,000 and the LTV is 75% the lender will advance £75,000 and so on.

In the above example who pays the remaining 25%?

You do, this is your deposit amount.

What % below market value should I buy at?

The simple answer is as far as possible but this will depend on many factors such as whether property prices are rising or falling, the area, type of property, condition and rental potential.

Can you give me a guide for 2009?

Most investors want at least 20% below RICS valuation and preferably 25% or more.

How can I get property at these discounts?

You can either generate your own vendor enquiries from motivated sellers and negotiate direct with the homeowner or you can buy ‘ready made deals’ from property investment companies.

Which is the best method?

It depends on your skills as a negotiator and how much time you have available. Unless you are experienced in advertising and negotiation and have plenty of free time it is probably best to buy ready made deals.

Any advice on buying ready made deals?

Always make sure that your purchase price is at a discount ‘off RICS’, get a guarantee that any reservation fees you pay will be returned if your lender’s RICS valuation is lower than that stated by the RMD company and do whatever due diligence you feel is necessary to ensure the property is suitable for investment.

Best Regards,

Colin Parker

Make sure you get your Webinar invitation by subscribing to our free Newsletter - if you have not subscribed already - please do so below.

Register To Watch Our Live Webinars Starting In March

First Name Email ,

  That's it for now!  Thanks again for visiting our website today.