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Wednesday, April 21, 2010

Cash really is king

I had an encouraging experience yesterday.

I'm up and hunting to add to my property portfolio.

Not because I think house prices are going to surge upwards. Actually I expect them to drift for the next 5 years or so whilst who ever in power has to respond to UKs huge public debt.

No. More because there are bargains out there & whats more you are not having to fight off hoards of idiot amateur investors trying to out bid each other & because with five year fixed rate mortgages at less than 6% I'm happy to lock into this & wait for interest rates and inflation to rise.

I've just put down an offer on one two bed maisonette. It needs a little cosmetic work costing about £5k or so but it's in a reasonable spot for renting out - good pubs, good bus route, etc. Plus it has a garage.

My offer was in cash. As usual with a property transaction there is a human aspect to it all. The vendor has a matrimonial situation so can't move out straight away until they have sold their other property. I'm in no rush. So I went into the agents with my proof of funds. A recent statement from my stockbroker showing my depleted portfolio that just about crept into 6 figures.

Landlord treated like royalty about being treated like royalty. Straight away a rather subservient assistant passed me on to the branch manager. He sat me down & explained that the property had a number of offers and the domestic back story which I already knew. He than flicked about on his computer in my full view so I could see the offers they had received already on the property but none were in cash. However, rather than dismissing me as a pathetic under bidder he listened intently to my reasoning that I wasn't going to over pay and that I wasn't desperate to do a deal and was happy to wait. He than took down my requirements and started to run through a whole plethora of properties.

The moral of this story is that market has staged a a degree. But if you are a landlord looking for a really good deal - try and plump up your bank balance because.

Cash really is king!

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