This is an exercise we do about due diligence – it is very important that you are able to look at this - and double check it. Here are a few tips to get you thinking:
1. Make sure you are working in the right area – have you checked
• Transport links
• Hospitals
• University
• Urban regeneration plans
• Etc
2. Have you checked the various websites with regard to current market value and rent – this can normally be done via www.rightmove.co.uk or www.hometrack.co.uk
3. Have you checked that the deal stacks up? It may be all very well that the property is reduced by 15% or 20%, but unless the rent stacks up and the yield is strong at around about 6% it is unlikely that you will be able to get finance in today’s market.
4. Make sure that you have checked the location with regard to rental demand and that you have spoken to at least three letting agents in the area and at least three local estate agents in order to gain solid background information about the area.
5. Have you checked with the Land Registry to establish who owns the property and also to compare it with properties that have been sold in the area recently.
6. Make sure you have visited the property and double checked regeneration issues and any possible liabilities relating to the property.
