Once you have found your perfect property you want to use as investment, you should decide how to bid for it. Here are some ways of negotiation of property that will be used for business (to be sold or rented):
1. Do not fall in love with your target property too much
When you are going to buy a property, you should not get too carried away by the feeling of love. If you fall in love with your target property too much, the selling price of the property will not be profitable for you. Remember, this property will not be the one you live in, but you will sell or rent it to others. So, you do not need to fall in love with this property. All you need to love is the cash flow that you will get later.
2. Prepare to compromise
You could say there will be no negotiations unless accompanied by compromise. Keep the negotiation under your control. That means you also must be flexible. For example, if the owner accepts your offer price and needs one month to move into his/her new home, you must approve it as long as it does not exceed the deadline.
3. Offer a reasonable price
Generally, if someone has already liked the target property, he or she will offer a price without a second thought. You should give a reasonable offer. So, like what is called a reasonable offer? It is the offer rate which is equal to cash flow from the property. Then, you can use bargaining tactics within 3 or 4 days. Use these 3 or 4 days to do observations directly in the location of the property.
4 Remember, good cash flow, not the property price
Before making an offer, you have to calculate in advance the potential benefits of the property to be purchased. Compare its price to the price in property market. Compare also the liquidation price and the transaction price. By comparing some of the above, you can know your target potential cash back. Only then you can calculate its potential cash flow. From the comparison of cash back and cash flow, you can define the offer price for your target property.
5. Decide the limits of the offer price
It is important for you to determine the maximum limit of your target property offer price. If the owner does not receive the maximum price you are offering, you should stop the negotiation.
Image credit: hubspot.net