In most markets, prices are largely inflexible. For example, the market value of gold at any given moment is the value of gold and this is the price you are going to pay. The same for stocks; if Microsoft stocks are trading at 200 dollars, that’s what you’re going to pay. There is no ability to negotiate. However, real estate is a different story.
It’s not uncommon for properties to be sold for under their market value. This leads to situations of instant equity.
Instant equity is a phenomenon that occurs when you purchase something at a discount. When you purchase a property for less than its market value, you automatically increase your net worth. This is because if you were to sell or refinance the property later, it would be worth more than you paid for it, and you gain that difference.
Because of this, properties that provide you with instant equity are a good investment. The equity you have from these properties also provides a financial buffer in case of unforeseen problems.
So, it seems obvious that buying at a discount is a smart decision. However, you might still be wondering why people choose to sell their properties for less than market value. As it happens, there are a multitude of reasons someone might choose to undercharge for what they own.
They might be experiencing financial difficulties that require that they liquidate their assets sooner rather than later. In that case, they would be more interested in moving the property quickly and efficiently, rather than seeking top dollar. Someone might be going through a divorce and need to sell their house to settle the case. It can even be as simple as someone inheriting a property they don’t want and liquidating it as quickly as possible.
Regardless of the reason, people selling their properties at a discount is a great investment opportunity. Real estate is a rare example of a market where you can barter, and this can be used to your advantage. For this reason and more, real estate is a great choice for investing.
ABOUT July Ono.
JulyOno.com is a real estate investment company. We have been actively involved in the Lower Mainland area real estate investing for a number of years. Our mission is to provide local housing and commercial workspace to quality tenants while at the same time providing an above average return on investment (R.O.I.) for our investor partners and for ourselves. It is truly a win-win-win way of investing!
July offers her investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact July Ono.