Good investment opportunities are hard to come by, and when you have a wad of fivers burning a hole in your pocket, it’s tempting to blow it on the first good deal which comes along – without taking a hard look at what it is you’re actually buying.
The need to acquire is a basic human instinct, after all. And the urge to bag a bargain can be almost overwhelming at times.
That’s great if you spot a pair of knitted Yeezies at half price – if it transpires that they’re fake, who’s going to know? It’s £50 well spent on a pair of comfortable, if somewhat ridiculous-looking shoes.
And if you’re the kind of person who falls for the so-called ‘Black Friday’ sales, and Amazon’s prime day, at least you can get your money back after the initial purchase euphoria wears off.
Not so if the cash your splashing is tens of thousands, and what you’re buying is property.
If you’re a property baron with cash to burn, then perhaps stalking the auction houses for bargains is your thing. But surely no-one would spend their life savings buying property, sight unseen, far away from their home base.
Unfortunately, some people completely lack any kind of sense, and this situation is becoming more and more common as investors look beyond London for opportunities.
Over a nice cup of tea in a bicycle repair shop, Rent.works spoke to Northern property maven, Vicki Peers of VM Property Solutions,
“There are a lot of people from the south who are cash rich and time poor, and there are people who want to leave their jobs who just want a quick cash flow,” she told us. “And some people – around 30% – aren’t even visiting the city they’re buying property in.”
As we’ve mentioned before, we at rent.works think that life in the 21st century is fantastic, and the fact you can use google maps to scope out a neighbourhood hundreds of miles away makes the hunt for houses that much easier. But Vicki warns against using google exclusively.
“We have one property in L5, and according to google, the houses are all boarded up, there are abandoned cars, and it’s a dump. In reality it’s a really nice area. The images are out of date, and you really have no idea what you’re getting into unless you visit.”
It seems like common sense, but as Vicki pointed out, around 30% of out of town property investors, don’t bother leaving their armchair before throwing handfuls of cash at their solicitor.
As we’re sure you can guess, it doesn’t often end well.
“One woman bought three properties without seeing any of them,” Vicki related over coffee. “They were supposedly finished by the owner and had tenants in. But she never actually came to look.
“It was only a couple of months later when her agents were trying to keep the tenants happy, that she realised there were all kinds of problems.”
What kind of problems?
Rat problems. Drain problem. Structural problems. Problems, she wouldn’t have had if she had either visited the property or engaged a firm of surveyors or local experts to tell her about them.
“She just sold up at auction and made a loss of £12,000. They were so bad that the leading agent just couldn’t keep tenants in them.”
Let that be a lesson to you all