1. Buy at auction: Vendors experiencing financial difficulties can be desperate to sell quickly – often below market value. Auctions are also a common avenue for banks selling off repossessed properties at attractive prices.
2. Keep an eye out in the press: Both local papers and the national sector press advertise the latest distressed sales and impending auctions.
3. Look at failed buy-to-let investments: Many of the more naïve investors who jumped in at the top of the market two or three years ago have found remortgaging difficult. They are now forced to sell as the rental income struggles to cover the increased mortgage repayments.
4. Be prepared to do some work: Auctions will often include “tired” stock. If you are prepared to spend time and money refurbishing, may offer significant discounts to prime stock.
5. Good contacts: Having a contact in or an intermediary with a bank or insolvency practitioner can give the opportunity to get a head start on a deal before a sale becomes public knowledge.
6. Residential development: Some house builders, especially smaller builders, are still facing difficulties. Part-built sites, or those already with planning permission, are coming to market at knock-down prices. Such sites offer a shorter route to achieving cash sales rather than buying land for development.
7. Access to cash: Lack of reliance on debt finance will be attractive to vendors, who may be willing to sell at a lower price to secure a quick sale.
8. Lack of development: If looking to invest in good quality space, look at areas where there is a lack of property development in the pipeline. As the market bounces back, there is potential for a growth spurt in income as rents respond positively to a lack of supply.
9. Look at alternative uses: Office values may have suffered in the recession but such property may well offer more viable opportunities for alternative use or redevelopment.
10. Consider share ownership: Investing in property through a property company can still offer opportunities. Even though most of the bigger players are now trading at a premium to their asset values, there are still some companies trading at discounts to their net asset value, which merit serious consideration for investment.