Knowledge is power. And research is highly linked to success. So knowing how to successfully carry out desktop research on a property deal can help you save time, effort and cash.
And it’ll help you make better decisions, no matter which property investment strategy you choose.
That’s why we created this robust checklist to help you pull off successful desktop research on a potential deal.
The beauty of what we’re about to tell you is the fact that you don’t even need to leave the comfort of your own home to do the bulk of the work.
As long as you’ve got your laptop, tablet or phone charged in front of you (and maybe a coffee), you’ve got all you need to make better decisions about a potential investment.
As the old saying goes: you get out what you put in. So you’ll need to dedicate some time if you want to get the results.
Here’s our four step checklist:
Price is an obvious factor when investing in property. And when researching a deal, you want to bag it for the best price possible while understanding it’s true value. And believe it or not, that involves ignoring the asking price completely.
These prices are almost always a jumping off point, and if you follow it blindly you could end up paying more than the property is worth and losing out on a cash saving.
To get a better understanding of what a property is worth, you’ll have to generate a list of recent sales in the area and of similar properties. And you can do this all from your laptop;
Once you’ve got your list, go through the properties and narrow them down based on the ones that are as similar to your potential investment as possible.
That means keeping the ones with the same number of rooms, similar size, and whether it’s terraced or detached. If this list is short on properties, go back and expand the distance to ½ mile radius and repeat the process.
From this, you’ll be able to work out the range of most similar sale prices. The ones that were sold most recently are the most reliable – those that were sold over a year ago may not be particularly useful due to changes in the market.
Once you’ve completed step one, you’ll have made an educated guess about how much your property is worth – all from your own laptop.
Much like step one, this step is vital to ensuring that the property you’re buying is going to be a financially viable one for you when you eventually get it let.
And again, you can make an educated guess about this figure simply by using Rightmove.
Here’s the steps to follow;
You’ll need to make this list more representative of a realistic rental price, so ignore any short lets (they’’ll be the most expensive) and rooms in shared houses/HMOs (those will be considerably cheaper).
Now the list is more refined, make note of the range between the most and least expensive properties left.
Have a look at the properties on the list which fit your property best (based on quality, size and location), then click into them to get an idea of similar rental prices you’ll be able to ask for.
But that’s not all. You’ll also need to check out rental demand by getting an idea of how quickly these properties rent, and you can use this list to;
Finally, you can validate the research you’ve done by calling local letting agents to confirm your results (and it never hurts to have a good relationship with letting agents in your preferred area, either).
Yes, that title might seem a bit obvious, but that doesn’t make it any less important. No point moving forward if the property isn’t financially viable for you.
This step basically asks you to calculate the yield and ROI that the property will give you, based on your estimated purchase price and rent.
We’ve covered how you can successfully carry out this research on your desktop in an earlier article.
Hopefully these numbers meet your personal targets, and in that case you can carry on!
But if not, you’re either going to have to try and secure a lower price for the property, or you’ll need to move on elsewhere.
Carrying out due diligence on a potential property is the last, but no less important, step to successfully carry out desktop research.
The Robs have spoken before about their own due diligence process prior to investing, but here’s the general checklist you should follow at this stage;
You’ll need to look for any structural issues, including (but not restricted to):
By reviewing the images available on Rightmove closely, you’ll be able to check for major physical issues. However, it’s always worth stepping away from the desktop and viewing, unless you outsource this to someone trustworthy.
And if you need a bit of extra reassurance, you can commission a HomeBuyer Report or full structural survey.
By this stage of the process, you’ll also need to get in touch with your solicitor. You can make sure that they’ve checked for legal issues, including (but not limited to);
Once you’ve got the reports and feedback on potential issues that you need, you’ll need to use all the newly acquired knowledge to decide whether you’re willing to pay for refurbishments or if you want to continue to search for a different property to invest in.
So you see, there’s a lot of work you can do all by yourself in order to properly evaluate whether you want to buy a property or not.
To avoid paying over the odds for a property or missing out on a potential deal entirely, carry out these four steps and you’ll have some peace of mind that you’re making the right decision.
Download our FREE checklist here and use it to help you successfully carry out desktop research.
We’ve also shared the due diligence we do for clients of Property Hub Invest right here. Here we dive into developers, funding, lease checks, mortgageability and much more. All of which we do when sourcing deals for our clients.