Buy low + sell high. Agree?

Do you agree with this strategy?

I think it is important to negotiate your purchase as you make your profit when you buy.

Do you look for distressed (mortgagee, divorce, deceased) property?

I'm interested to hear if you use this strategy, and how you identify property that you can buy at a discount.

 

Lots of ways to interpret this. Newbies interpret it as looking for below market, whatever that means. Too straw man, since saying no is stupid and saying yes can be interpreted anyway you want to grind your axe.

Low and high can be in a cyclical sense. Say in sydney you paid 5% more than market in 2012 and sold 5% below market in 2017. Still good.

 

I would also add, that the name of the game isn't just about getting cheap properties. It is also about getting quality properties. Often, the good properties don't sell at a discount - but these are still the properties that you want to get your hands on.

With real estate, you've really got to play a long game, and ask yourself, which properties do I want to own 10, 20 or even 30 years from now. What do I want to pass on to my children etc.

If you get a dud property 5% below market, that is not a bargain in the scheme of things.

 

Sharing my own opinion... I have to agree.

If you've decided the area you want to buy, the type of property you want to buy, then the next step is to look to buy at a discount.

 

Don't fetishise getting under market price. "Market price" is really what you pay for it, and if we are being honest with ourselves, it is not always obvious whether you got a bargain for say a year or two after the purchase.

What you will know immediately however, is that the property is desirable. So focus on desirability, location, layout, land content etc.

To your initial question however: yes, buy low, sell high.

 

My strategy buy right
Pay high to get it
Hold for ever
(Last 29 I paid more than registered valuer had valued it . One I believe paid $1m more than the second tenderer)

 

Last 29?

 

I looked back a bit further .
It's probably about 50 I paid over 5 under the rest no valuation done

 

I use this strategy. I just go through listings and filter, filter, filter. It can take a few years to find a great deal.

 

Very refreshing to see a BA say market value is what you pay for it.

Been trying to tell people on here this for a long time.

 

Thanks albanga,

"Under market" is not language I use with my clients. I tend to describe what I buy as "good deals" (or "good value") vs "bad deals".

There is a hubris to describing something as "under market" - it suggests that you have outsmarted all of the other participants in the market, which is almost never the case. The market is pretty clever.

 

Agreed
Quality over Quantity.. Always.


like John said only such thing as a good deal, or to a certain extent a deal you are happy with. fair deal is all we can look for. dont try to play the zero sum game..

 

I find this term annoying. It is the defining principle of business - sell something for more than you paid for it.

In terms of when you make you profit it is made across the whole process. Buying well, timing, improvements, renting/developing then selling. Each adds to the total.

 

"Low" yes, I suppose, but not necessarily "under market".

 

I aim to buy houses for as close to land value as possible, and ensure the house can be cosmetically renovated, and no more read than that. Its pretty basic stuff.

That, and picking a good street, suburb etc.

I (thrice) bought houses at land value in Brisbane....at least one of those was/is a complete fibro dump...and its still stands today, rented to the same tenants.

Only gripe is the rent is low (commensurate with quality of the prop) and will cost at least $30K to renovate.

 

Unless it was dear old mum and pop selling it to their dearest child, you are paying what the market is willing to pay.

I would say, you may pay below what the property could be worth.

So it may be a house for $400k.
But developed, there is a $400k profit.
I would gladly pay $450k. Above market for a house, below for what it could be.

Or more likely, it doesn't stack up as a house, not even as a duplex. Yet you know it could be a profitable child care centre. The aim is to extract the highest value from the land.

The trick is learning to see what others cannot.

 

OMG where have you all been the last 6 years I have been on this forum and before that SS.

I’ve been to war in past threads regarding the term “Under Market Value”. Felt like it was me against the world.
Now everybody is in agreement!

The term is absolutely “Good Buy”.

Correct sentence = “Yeah I purchased a house, I reckon it was a really good buy”.

Incorrect Sentence = “Yeah I purchased a house, I reckon I got it below market value”

YEAH NAH sorry mate you are the market!

 

Depends on whether the property is advertised accurately on the open market, a forced sale or sold "off market".

If a property is sold "off market" then how can you say it sold for "market value"?

If a sale is forced and the seller has to accept a low offer due to an artificial deadline when only a limited number of people have seen it, then how can you say it sold for market value?

I have seen a triplex block marketed as a duplex block. Very few people who viewed the property would have realised that it could be subdivided into three blocks. Did it sell at market value?

I agree that when an informed buyer buys a property on the open market from an informed seller, without any artificial time constraints, then the transaction is at market value. That represents most sales.

However, there are sales where one or more of these factors isn't true. In those cases the transaction may not be at market value.

It is factually incorrect to assert that a property can't be sold below market value because it does happen. I agree it's not common.