While Australia continues to enjoy the fruits of the ongoing property boom, it does mean that house prices are rising sharply. This can make it harder to for anyone buying an investment property to find investments that will produce returns and create capital growth over time.
One result has been that this rise in prices, combined with shifts in how the housing market operates due to Covid-19, has led to a growing demand for off market investment property.
However, for both new and more experienced investors, off market property is not necessarily an area that they will have access to or even know much about. What follows is a quick guide to finding and buying off market investment property that we hope will help you to become better informed about this type of investment.
What are off market properties?
Off market properties are generally considered to be properties that are being put up for sale, but which are not (yet) being advertised or made available to the general public.
In some cases, the term off market property is used simply for when prospective buyers are given an opportunity to view a property before the vendor starts to advertise it to the wider market. In this case, pre-market property is probably a more accurate description.
Therefore, when we talk about off market investment property, what we generally mean is properties where the vendor does not ever intend for the sale of their asset to become widely known or advertised publicly, either through listing sites or contracted out to real estate agents. In the past, most off market properties sold in this way were ultra high end, or the owner was a celebrity or a public figure, but this is no longer necessarily the case.
Off market properties can also be made available through private sale, where no agency or listings are involved (often to reduce costs) and so the property never comes to the market, or silent sale, when details of the property are only made available to selected agents’ databases of clients. Properties that were previously for sale that for some reason didn’t sell, but the owner is still open to selling, can also be classified as off market properties.
How do I find off market properties?
Although off market property can be an opportunity to grow an investment property portfolio, how do everyday investors learn about off market investment property?
Although there are several different approaches you can take so that you are in the loop regarding buying an investment property that is for sale off market, the key is getting the right advice and information from professionals with specific expertise in the area of off market investment property.
With the right professional input and connections, you have the opportunity to gain access to off market investment property that is not yet available in the public domain. Therefore, rather than trying to do it on your own, get in touch with us and we can assist you and guide you through the process.
Advantages of buying off market investment property
There are some advantages to buying investment property off market for anyone in the process of building a property portfolio.
Although there is generally less room for negotiation when buying an off market investment property, there is also less competition from other buyers, soyou are not drawn into a bidding war, either at an auction or elsewhere.
In addition, the process can be less convoluted and time consuming, as you will be provided with information on specific properties in which you are likely to be interested, so you don’t need to spend huge amounts of time trawling through online listings, or going to multiple opens inspections to try and find somewhere that meets your criteria.
Disadvantages of buying off market investment property
There are also some disadvantages when buying investment property that is off market.
As above, there can be less to manoeuvre on price, and there is also the possibility that the amount the vendor is asking is inflated in order to cover the costs of a buyer’s agent, or whoever is bringing the property to market. It can also be the case that you don’t get all the relevant and necessary information you require up front about the physical state of the property, or its past history.
Therefore, you should always carry out your due diligence and have an independent inspection and evaluation any time you are considering buying an investment property, irrespective of the circumstances under which you are making the purchase.
When you’re buying an investment property, talk to High Income Property first
At High Income Property, we are property investment specialists and can provide you with well considered strategic advice on all aspects of off market investment property.
To find out more about buying investment property and whether off market property is right for you, get in touch with us at firstname.lastname@example.org or call us on (02) 8007 4001.