Property investments - different ways to invest in properties
Having your own place to live is certainly one of the most important essentials things in life and this is one of the simple fact that makes property on of the most exciting, most financially rewarding opportunities you will ever encounter. Here is the list of different ways people invest in properties:
Below Market Value Property Investment
A below market value (BMV) investment seems like a very attractive proposition, in that it involves a property being purchased for a price which is less than it could reasonably be expected to be sold for on the open market. A BMV property could therefore be regarded very simply as being a bargain. However, BMV properties are usually very difficult for ordinary people to find, and are often bought by professional property developers. Whilst there is a large market for BMV properties, it must be remembered that housing markets are typically volatile, and therefore there are no guarantees that a BMV investment will result in a profit being made.
A probate property is one which is included in a deceased person's estate. An estate administrator must determine who the inheritors of the property are based on the deceased person's last will and testament. In some situations there will be no heirs, in which case the probate property will often be put up for sale. Probate properties can represent a good investment for property developers, as they can often be purchased at below the open market value for the property. This is true regardless of whether the sale has been authorised by the heirs or the estate administrator, as in both cases a swift resolution is preferred.
Auction properties represent another opportunity to secure a property at below its value on the open market. Whilst auction properties will often have a reserve price which must be met, the nature of the way in which they are sold means that they can be purchased very inexpensively. A property auction will work in exactly the same way as an auction for cars or antiques, with people bidding against each other in increasing increments until there is only one bidder left. The properties which are put up for auction have often been repossessed by mortgage lenders due to defaulted payments. The lenders are simply looking to recoup any money they can for the properties as quickly as possible.
Lease options exist for a variety of investment opportunities, including property. They offer people the opportunity to rent a property for a set period of time, usually several years, after which they will have the option to buy it. They do not have to exercise this option if they do not wish to. The price of the property will be determined when the lease option is taken out. Lease options are often an attractive option for people who would like to become first time buyers but cannot afford to. The premium which a tenant will pay when taking out a lease option will generally be much less expensive than the deposit which will be required to secure a mortgage.
House Of Multiple Occupancy Property
A house of multiple occupancy (HMO) is a property in which there are several different occupants paying rent. This could refer to student accommodation, a house or flat sharing arrangement, or a property which has been subdivided into separate individual flats. An HMO is therefore owned by a landlord, and must be licensed by the local authority. Landlords can apply to mortgage lenders for a specialist buy to let mortgage in order to purchase an HMO property.
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