Our paid free guide shows you how to get a buy-to-let mortage for less than £100 per month
And earn a rental income of £400+ per month INSTANTLY!
Deepak Shukla
Founder at Pearl Lemon Properties
Pearl Lemon Properties is a market-leading investment specialist advisory service specializing in locating Below Market Value residential and commercial properties in London, the United Kingdom, and abroad.
Our commitment to serving you and our stellar business knowledge, combined with our unrivaled expert network, allows us to carefully choose BMV properties to ensure that you get the most out of your Below Market Value property investment.
What are BMV Properties?
BMV, or below market value, refers to a property that has been bought at a reduced price. We find investment properties that can be prurchased by our investors at a discount of up to 25% – 40% off the genuine RICS property valuation.
Whether you are an experienced landlord looking to grow your portfolio or a first-time investor with no prior experience in the industry, we have the right solution for you. Why pay full market value for a property when you can get a better deal and get genuine equity to protect your investment?
Regardless of your motivation for purchasing property, buying a property below market value will save you thousands of pounds compared to buying on the open market at full value. Working with Pearl Lemon Properties will ensure that you get the biggest possible bang for your buck.
Are Below Market Properties Inferior?
The term “below market” can refer to any investment, but in this case it applies to real estate.
Below Market Value (BMV) assets are those that are available for sale less than the current market value. But why would someone sell a property for less than it’s market value? There must be something wrong with it, right?
In many cases the answer is no. Some BMV properties do need work, but in many cases the reasons for a BMV sale are more personal to the seller. They might be facing severe financial hardship – even a property repossession – that means a quick sale will make their lives easier. Or, a new job, a big move or a life change may might mean they are willing to sell their property for below market value.
There might be 101 reasons, but the point here is that just because a property is being sold at BMV does not mean it is deficient or meets lower standards. On the other hand, in some cases it might, and you would need to weight up the pros and cons carefully before making a decision.
Passive Income
Growth Potential
Growth Potential
The Benefits of Investing in Below Market Value Property
The price is, of course, one of the most important advantages of any BMV property investment. As an investor, a good price paired with a property that can be resold or rented out is a perfect way to make a good profit.
The majority of properties can be priced at 20% to 40% less than the market price for traditional residential properties. When it comes to buying BMV stock, that’s a significant discount for investors to take advantage of.
To determine the value of the property to you personally, you need to understand the market value of the properties in the region. Which will not only mean understanding the property market but the region in general.
The old real estate adage ‘location is everything’ takes on a new meaning for BMV, as sometimes the best gains are made in up and coming, developing areas. Understanding where those are is a specialist skill. Specialist Skills that Pearl Lemon Properties can offer to you.
What to Look for When Buying a Property for Less Than Its Market Value
Purchasing real estate assets at a discount should be approached with caution. Sellers may be selling homes with flaws or other hidden costs. Attempting to purchase inexpensive properties requires the same level of due diligence as any other land purchase, and usually even more.
Investors should examine each property and ensure that they hire a reputable consultant to conduct the required research and analysis. Price development, sales levels, and statistics on property interest should be examined for variations over a period of at least 12 months.
How Pearl Lemon Properties Can Help
We do all research, so you don’t need to.
We will find you the pros you need to close BMV deals successfully.
We will find you the pros you need to close BMV deals successfully.
Call us, and we’ll show you a bunch of BMV properties and try and convince you to buy one? Not at all. We can’t suggest the best below market investment properties for you unless we know what you’re trying to accomplish.
That’s why we begin our process by spending time with you – and we continue to help you all the way until you close on a BMV property that aligns with the goals we’ve set together.
You will have access to our vast network of Legal Advisers, Surveyors, Mortgage Providers, Letting Agents, Building Contractors, Finance and Bridging specialists, which means you will only have to deal with one point of contact for all of these essential services.
Our highly experienced team will help you find the best BMV property investment for you and put your available investment funds into instant equity and cash flow, whether the purchase is designed to bolster and diversify for your investment portfolio, as a retirement fund or even as a simple buy-to-let.
FAQs
What is the definition of Below Market Value?
Market value is described by the Royal Institute of Chartered Surveyors (RICS) as “the estimated amount for which a property should trade on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after property marketing whereby both parties acted knowledgeably, prudently, and without compulsion.”
The trick to buying a property below market value is to do so “without compulsion.”
For example, why would someone sell their home for less than it’s worth if they weren’t forced to? Above all, it’s worth noting that this is one of the most challenging areas to navigate when purchasing a BMV property.
For example, it’s difficult to tell if the property is cheaper because the seller is desperate to sell or if anything is wrong with it that you aren’t aware of.
Furthermore, you may hear statements such as “there is no such thing as ‘below market value.'” Some argue that since it was sold for that price, that amount is the market value of the property.
What we mean by buying BMV is that we want to purchase a house that we might fairly expect to sell for a better price if we sold it again in the same market. And such properties certainly do exist.
Should I buy a Below Market Value Property?
The short answer is yes, but you must tread carefully. As previously stated, no one sells their home for less than it is worth unless there is a compelling reason to do so. “Why is this seller willing to sell this at this price?” is the thing you should ask yourself first when considering any BMV property for sale.
Even if you believe you have been offered a compelling reason for this ‘cheap sale’, you must also conduct thorough research. This is due to the fact that deception exists. And desperate sellers lie. Seriously, it does happen. Quite a bit.
Understand the area, do twice as much research as you normally would, and get a more detailed survey done. If you are going to work with a BMV property sourcer, make sure it’s a trustworthy one. Do your homework there too.
However, even with all this due diligence, you can always miss stuff, so there’s a chance you’ll end up with a shoddy BMV property that gives you a serious headache. Also, don’t always take the price tag of nearby properties as a positive measure of value when attempting to purchase a property below market value. It’s possible that those are selling at that price for a variety of reasons.
Always do your homework and, if possible, go out and find the properties with the help of a trusted expert. So, after all of this, the response is still yes, if you have the available funds a BMV property purchase can be a great one, as long as you proceed with common sense and caution.
How can I determine how much a BMV Property will cost to renovate?
Many builders and construction specialists will offer free – or nearly free – estimates on proposed work. The trick is to make sure that you get those estimates BEFORE you buy a BMV property, so that the chance you end up stuck with a money pit is minimized.
What's better, buying a BMV property to rent out or one to fix up and sell on?
There is no one right answer here. In some markets, where the demand for rental property is high – usually larger cities but not always – buying a BMV property to let out is the most sensible move if you are looking to create a reliable, steady source of income.
On the other hand, if the area supports higher pricing, and you are reasonably sure that renovating a BMV property will significantly increase its value and salability, and you have the time, money and expert help to do so, renovating to sell on may be a better idea.
Is becoming a landlord hard?
If you buy a BMV property to let out, you’ll become a landlord, and we are not going to pretend that taking on that responsibility is easy. Depending on the location of the property there will be regulations to follow and standards to meet.
Finding the right tenants can be a time-consuming process, as can dealing with them if something goes wrong at the property (or they fail to live up to the rent expectations.) On the other hand, property rentals are, when the conditions are right, an ideal source of stable, passive income.
One option many go with is to hire a property management company to do all the annoying landlord stuff for them. This is indeed a great solution, as long as doing so does not cut too far into your profit margins on the property in general.
Area is as much of a factor in a BMV buy to let purchase, and researching that is as important as doing due diligence on researching the property. This does not mean just researching the town or city, but the neighbourhood itself.
One good idea is to speak with other landlords in the area (if there are none, that may be a problem in itself, as that likely means there is no rental market)
Online forums will help you figure out which types of properties are the most lucrative for landlords, as well as how they handle new acquisitions and account for all the related operating expenses.
If you intend to invest in a place that is far from your current location, it is a good idea to ask local landlords about the area’s advantages and drawbacks before making a final decision. They’ll be able to give you an idea of the rent you might charge, as well as information on popular streets and property types.
Do I have to view a BMV property in person?
Ideally, one might say yes. However, travel is not always easy – and pandemic restrictions have made it very hard – and so property agents have become very adept at the art of the virtual showing. These showings allow you to ask the same questions as you might in person, and ask to see any accessible areas.
A local survey will be a must too, and whether you eventually intend to visit the property or not ordering one is an important part of that property research we keep emphasizing. What does not look too bad on the surface may be a nightmare underneath, or, on the other hand, a property with great ‘bones’ may just be currently spoiled by something as simple as clutter and a bad paint job.
This all sounds like a lot of work. Who can help me find the right BMV properties?
Buying BMV property for the first time can be daunting, and it’s fair to say there is a lot of work to be done prior to purchase, especially when it comes to property and area research. Working with a trusted BMV property sourcing company allows you to reap the benefits of BMV property investment while dealing with far fewer of the hassles.
A good BMV property sourcing company will take care of that research we have kept harping on about, and present you with reports on their findings that you can refer back to as to deal proceeds. They can also help you find reliable local builders if renovations are called for and provide you with crucial area information.
Where are the best areas to invest in?
London is always going to be a good investment, if you can source suitable BMV properties there. However, even at BMV prices it may be beyond the budget of the smaller investor. The fact is that there are excellent BMV investment opportunities all over the UK, and even abroad. The trick is finding them.