Last updated: 26 Dec 2023
In the latest episode of Deal Finder's Corner, Guillaume Black had the honour of hosting Shimon Rudich, who is not only a property expert but also a respected writer, international speaker, and charity fundraiser. With his extensive background in property investment, Shimon brings a wealth of knowledge to the discussion about the property market in the UK.
In the world of property investment, making mistakes can be costly. While many may shy away from investing during a market downturn, experienced investors like Shimon Rudich, a Senior Partner at MS Law Solicitors and a property educator with over 20 years of experience, know that such times can offer unique opportunities.
Shimon sheds light on the prevailing market trends and shares invaluable insights that can empower both seasoned and junior property investors.
"Ugly Duckling" is one of Shimon's standout lease option creative strategies.
Reduced Competition: During a market crash, the number of property investors decreases, resulting in less competition and potentially more accessible deals.
Lower Property Prices: Property prices may experience a decline, while rental income often remains stable, creating an environment conducive to profitable investments.
Creative Opportunities: Properties in negative equity or those requiring refurbishment can be purchased at a significant discount, opening doors for creative and lucrative investment strategies.
Reduced Valuations: Property valuations may decrease, which can impact the amount you can borrow from lenders.
Increased Interest Rates and Fewer Mortgages: Banks tend to exercise caution during economic uncertainty, offering fewer mortgages at higher interest rates.
Reduced Room for Mistakes: In a market characterised by uncertainty, mistakes can be less forgiving, particularly concerning remortgages.
In a down market, one remarkable tool shines through - the lease option. While the buy refurbish refinance strategy requires significant capital and mortgage qualifying, this creative approach offers several compelling advantages without those traditional barriers:
No Mortgage: Lease options don't require a mortgage, simplifying the purchase process.
No Surveyor: By avoiding property surveys, you can save both time and money.
Generosity in Offer: Lease options allow you to extend a more generous offer than the property's current market value to the owner.
Minimal Upfront Cash: Apart from legal fees, significant initial capital isn't obligatory.
Despite the evident potential, many investors fail to adequately explain the concept of lease option to vendors resulting in the deals fail through. Therefore effective communication and negotiations skills are crucial to be able to execute these types of deals.
Contrary to a common misconception, Shimon believes that longer lease options don't necessarily mean a more significant profit. Sellers typically don't want to wait years for their money, and investors often don't require such extended terms.
Deal Finder's Corner is your weekly property talk show, proudly brought to you by Property Filter. Our mission is to equip you with the best resources by inviting expert guests to share the most up-to-date and effective strategies, tactics, and insights for finding and securing property deals across the UK.
