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One of the key points of my investment strategy in properties<\/strong> that I buy to rent is to get the best purchase price. It is not easy to buy properties underneath their market value, but it is very important to achieve it for various reasons.<\/p>\n Is the purchase goal is to add profitability to the asset; it is key to get a good offer for the purchase of the property.<\/strong><\/p>\n A purchase price underneath the market allows you to build an invertible net present value, increase the cash flow and sell the property if there is a problem.<\/p>\n I talk about how to buy properties underneath its market value, but \u00bfhow can you determine a great offer on a rent property?<\/strong><\/p>\n <\/p>\n The first step<\/strong> comes form understanding what market value is. Once you know that you need to know how low you want to go to purchase the asset, because buying a property for 1 euro less than its\u2019 market value isn\u2019t a great deal.<\/p>\n <\/p>\n How low from its\u2019 market value do you have to go for an offer to be good? <\/strong><\/span><\/p>\n When I buy rental properties<\/strong>, I establish a purchase goal of at least 20% lower than the market price. The reason why I buy them so low is because I want to have a good cash flow, that is why the lower the price the higher the cash flow.<\/p>\n Doing these acquisitions in prices lower to the market allows me to an easiest refinance and building a good wealth at a reasonable price. The more of this that I have more opportunities I will have to obtain lends from the bank to keep on buying. My plan is to purchase 10 rental properties this month.<\/p>\n In deed I don\u2019t think that you need to buy a rental property 20% lower to its\u2019 market value for it to be a good offer. You need to decide for yourself how much you need from each business.<\/p>\n The lowest form the market value the hardest it will be to find rental properties<\/strong>. That is why it is basic that you surround yourself of a good real estate adviser who shows you investment product at a reasonable price. In Cat Real Estate we specialize in that. On the other hand, I already tell you that if you want a property 50% underneath its\u2019 market value,<\/strong> you will never get that property.<\/p>\n <\/p>\n How do remodeling affect the purchase of a property below market value?<\/strong><\/span><\/p>\n Some people ask me: \u201cWhat can I do to buy a property that is 20.000\u20ac below market value<\/strong>, taking into account that this house needs 20.000\u20ac in work?<\/p>\n Renovations increase property value. But be careful sometimes people don\u2019t qualify the renovation value well and it ends up being more expensive.<\/p>\n A house value will vary depending on its condition. If your property needs 20.000\u20ac worth of remodeling, its final value will not be the purchase price plus the refurbishment, you will need to add 20% to the final value. This is statistical data on my experience in buying assets that need renovations.<\/p>\n <\/p>\n How do you calculate a good offer on a rental property that needs remodeling?<\/strong><\/span><\/p>\n I use the same formula for houses that need work and the ones that don\u2019t.<\/p>\n The market will vary for each one depending on how much discount the buyers will ask over the properties that they will buy and remodel.<\/p>\nHow to determine the market value in rent properties?<\/strong><\/h2>\n