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Three approaches to property investment and how to make them work for you

14/03/2024

In a world where change is the only constant, navigating the property market can feel daunting. From the effects of an economic crisis to shifting retail and office landscapes, staying ahead of the curve is essential for investors and developers looking to capitalise on opportunities. But with uncertainty comes opportunity, and understanding the different approaches to property acquisition is key to unlocking success.

For a comprehensive guide on how to buy right, download our Secrets to buying right: The ultimate guide to scaling your property business in 2024 eBook. In it, you’ll not only find a breakdown of different approaches to buying property, but also the importance of a focused strategy, and why a successful letter campaign is essential when buying off-market.

 

A changing market: evolving retail and workspaces

The property landscape has undergone significant transformations in recent years. With Covid-19 reshaping consumer behaviours and Brexit influencing economic policies, the market has experienced fluctuations that have left many investors and developers seeking stability. As we enter 2024, however, a more predictable marketplace is on the horizon, presenting new avenues for growth and investment.

The rise of online retail has forever altered the way consumers interact with physical storefronts. As retailers adapt to meet demands, there is a growing need for properties that can accommodate modern retail models. For investors and developers, this shift presents opportunities to repurpose existing spaces and create higher-value assets that align with changing market trends.

On the other side of the market, the widespread adoption of remote work has reshaped the office landscape, leading to a surge in vacant properties and plummeting values. However, as businesses begin to return to the office and adopt more hybrid ways of working, demand for flexible workspace solutions is rising, offering potential for value stabilisation and growth.

 

Residential Housing Market

 

Getting to grips with regulation updates

The introduction of the Class E use classification has streamlined the process of converting properties for different uses, providing investors and developers with newfound flexibility and opportunities for adaptation.

In addition, changes to permitted development rights have opened doors for property conversions and expansions, offering streamlined pathways for residential development and revitalisation.

Plus, the surge in online shopping has driven demand for warehouse space, creating opportunities for investors and developers to capitalise on the growing need for last-mile delivery services.

Amidst these changes, investors and developers must navigate the market with precision and strategy. To effectively unlock opportunities at favourable values, understanding the three typical ways of property acquisition is essential.

 

Approach 1: On-market

While on-market properties offer transparency and upfront pricing, competition can drive up prices, making it challenging to secure favourable returns. However, sophisticated investors can still find success by leveraging low-cost construction methods, maximising site density, and exploring alternative uses.

When does buying on-market work? Those who are successful do this by:

  • utilising low-cost construction methods or procurement techniques;
  • maximising site density;
  • implementing efficient and innovative designs;
  • exploring alternative uses that others haven’t considered;
  • being aware of specific occupier requirements of which others are unaware.

 

Approach 2: Off-market (via a local agent)

Building strong relationships with local agents can provide access to off-market opportunities and streamline the acquisition process. By leveraging an agent's knowledge and connections, investors and developers can gain insights into upcoming listings and secure properties before they hit the market. The benefit of this approach is that the agent takes on a significant portion of the work for you. Plus, in most cases, pricing is transparent. If it’s not, the agent steps in to manage the seller’s expectations.

 

Approach 3: Direct from vendor

Directly approaching property owners offers unparalleled control and potential for lucrative deals. Through targeted letter campaigns and strategic outreach, investors and developers can identify off-profile properties and negotiate favourable terms that align with investment goals.

Here’s a step-by-step breakdown.

  1. You’ll need to settle on a strategy and locate properties that align with your strategy – this is where Nimbus can enable you to obtain the contact information you need.
  2. Using this data, you then craft letters designed to kick-start negotiations. The beauty of this method lies in its unlimited scalability—the only constraint being the number of letters you send.
  3. Send letters to owners whose property matches your requirement. Often, the value of these properties is only unlocked once the necessary planning consent is obtained for your desired scheme, justifying a purchase price more than the current property value, so factor this into your approach.
  4. The owner receives the letter (and two follow-ups). Ideally, the owner will already be considering a sale but has yet to list the property on-market – or it could get them thinking about it. Either way, you will receive some warm responses to your letter and discussions can begin.
  5. Since the property is not actively on the market and the owner is not in a hurry to sell, you have ample time to design and cost the scheme and establish an acquisition structure that balances the risk and reward to each party and, ultimately, benefits all.

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 To find out more, download our ultimate guide to scaling your property business in 2024.

 

Unlock your property potential with Nimbus

To succeed in today's dynamic property market, having the right tools and resources is essential. Nimbus offers a comprehensive platform that empowers investors and developers to streamline their property search, access valuable data, and make informed decisions.

To find out more, download our eBook, The secrets to buying right: The ultimate guide to scaling your property business in 2024.

Ready to see Nimbus in action? Sign up for a personalised demo and discover how our platform can help you unlock the full potential of your property investments.

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Everything you need to know about off-market property

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https://www.nimbusmaps.co.uk/blog/everything-you-need-to-know-about-off-market-property - https://www.nimbusmaps.co.uk/blog/three-approaches-to-property-investment-and-how-to-make-them-work-for-you
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https://www.nimbusmaps.co.uk/blog/mipim-2024 - https://www.nimbusmaps.co.uk/blog/three-approaches-to-property-investment-and-how-to-make-them-work-for-you
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https://www.nimbusmaps.co.uk/blog/a-guide-to-permitted-development-rights-in-2024 - https://www.nimbusmaps.co.uk/blog/three-approaches-to-property-investment-and-how-to-make-them-work-for-you