So you've researched your target market of tenants, narrowed down the areas and types of property that fit your market, and decided on a budget for buying and preparing your property to rent. But what negotiation skills will you need to get estate agents on your side when you find the perfect property?
Building good relationships with estate agents is a vital part of building a successful buy-to-let property business. A friendly estate agent will make sure you hear about potentially suitable properties first, and can help in negotiating a fair price that will make your buy-to-let property investment more profitable.
When you find a property that you'd like to buy, make sure you think carefully about the real cost of getting it ready to rent. Will a single tenant or HMO(House in Multiple Occupation) property strategy be the most profitable - and is there demand in that area? What renovations will be necessary and what will they cost? How long will it take before you are able to start collecting rental income?
All these factors play a part in determining how much you should be prepared to pay for the property. Here are our top negotiation skills tips to help you buy at the right price:
Do your research
Knowledge is power. Using all of the information readily available online or through your landlord network, make sure you are fully prepared to negotiate on price. Research the recent sale prices of comparable properties, find out how long the property has been on the market and try to discover the reason behind the sale. This information can help you decide on negotiation strategies that will be successful.
Get a proper survey
You need to know if there are any faults with the property. If there are, and you still want to put in an offer, the cost of putting right any issues can be deducted from the asking price. So a full Home Buyers survey is always recommended.
Sell yourself as a buyer
As a private landlord you are an attractive prospect as a buyer - if you have the finance in place to offer a quick, stress-free sale with no chain to worry about, you are in a strong position to negotiate the best price.
Don't be afraid to offer low
It may feel a bit cheeky, but offering well below the asking price is a recognised negotiation technique. The estate agent is obliged to pass on your offer to the seller and this sets a starting point for negotiations to begin - go in too high with your initial offer and there's no going back, so consider your opening offer carefully. This approach will only work if the property has been slow to attract a buyer or sellers are under pressure to make a quick sale.
Stick to your budget
Don't get carried away imagining how you would renovate and market a property and set your heart on buying it no matter what - this is a business decision and you need to ensure your property investment provides maximum profitability. Sometimes it's best to accept defeat and keep on looking rather than make emotional decisions.
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It is important that landlords go into the house buying process with a negotiation style that is professional, informed and open. It is, after all, a negotiation process that should leave all parties happy with the outcome. A reasonable attitude and good negotiation skills will help build a positive relationship with your estate agent that could prove mutually beneficial in the future when expanding your property portfolio.
