Three approaches to property investment and how to make them work for you

A changing market: evolving retail and workspaces

The property landscape has undergone significant transformations in recent years. With Covid-19 reshaping consumer behaviours and Brexit influencing economic policies, the market has experienced fluctuations that have left many investors and developers seeking stability. In 2024, however, a more predictable marketplace is on the horizon, presenting new avenues for growth and investment.

The rise of online shopping has forever altered how consumers interact with physical storefronts. As retailers adapt to meet this expectation, there is a growing need for properties that can accommodate modern trading models. For businesses, the widespread adoption of remote work has reshaped the office landscape, leading to a surge in vacant properties and plummeting values. However, as companies begin to return to the office and adopt hybrid working, demand for flexible workspace solutions is rising, offering the potential for value stabilisation and growth.

These shifts present opportunities to repurpose existing spaces and create higher-value assets that align with these changing market trends.

Getting to grips with regulation updates

The introduction of the Class E use classification has streamlined the process of converting properties for different uses, providing investors and developers with newfound flexibility and opportunities for adaptation. In addition, changes to permitted development rights have opened doors for property conversions and expansions, offering streamlined pathways for residential development and revitalisation.

In addition, the surge in online shopping has driven demand for warehouse space, creating opportunities for investors and developers to capitalise on the growing need for last-mile delivery services.

Amidst these changes, investors and developers must navigate the market with precision and strategy. To effectively unlock opportunities at favourable values, understanding the three typical ways of property acquisition is essential.

Approach 1: On-Market

While on-market properties offer transparency and upfront pricing, competition can drive up prices, making it challenging to secure favourable returns. However, sophisticated investors can still find success by leveraging low-cost construction methods, maximising site density, and exploring alternative uses.

So when does buying on-market work? Successful developers do this by:

• maximising site density;
• implementing efficient and innovative designs;
• exploring alternative uses that others haven’t considered;
• utilising low-cost construction methods or procurement techniques;
• being aware of specific occupier requirements of which competitors are not.

Approach 2: Off-Market (via a local agent)

Building strong relationships with local agents can provide access to off-market opportunities and streamline the acquisition process. By leveraging an agent's knowledge and connections, investors and developers can gain insights into upcoming listings and secure properties before they hit the market. The benefit of this approach is that the agent takes on a significant portion of the work for you. What's more, in most cases, pricing is transparent. If it's not, the agent steps in to manage the seller's expectations.

Approach 3: Direct to vendor

A great way to sidestep most issues associated with on-market is to approach owners directly. This strategy offers greater control of the process and increases the potential for more lucrative deals. To succeed, this requires strategic outreach, primarily via a targeted letter campaign. Using this approach, those investors and developers who have identified off-profile properties (using Nimbus) can negotiate favourable terms that align with investment goals.

Here’s a step-by-step breakdown of this approach.

1. Find a strategy that you understand and are comfortable with, and then locate properties that align – this is where Nimbus can enable you to obtain the contact information you need, using features such as our site-finding filters and pre-defined strategies).
2. Once you have a list of properties (our My Sites project management tool will help you out here), you craft letters designed to kick-start negotiations. (Our direct-to-vendor letter-sending feature* is the tool you’re looking for).
3. Send letters to owners whose property matches your requirement. Often, the value of these properties is only unlocked after obtaining planning consent for your scheme, so factor this into your approach to justify a purchase price more than the current property value.
4. The owner receives the letter (and, if necessary, two follow-ups). For the perfect result, the owner will already be considering a sale but has yet to list the property on market – or it could get them thinking about it. Don't expect a flurry of responses – if you send letters to 100 potential owners (and two follow-ups), you might only get six to ten warm responses. Either way, once you have these, then discussions can begin.
5. Since the property is not actively on the market and the owner is not in a hurry to sell, you have ample time to design and cost the scheme and establish an acquisition structure that balances the risk and reward to each party and, ultimately, benefits all.

 To find out more, download our ultimate guide to scaling your property business in 2024.

Unlock your property potential with Nimbus

 This post then is a brief guide to the three approaches to buying property and the benefits of each. To succeed in any of these, having the right tools and resources is essential, and Nimbus offers a comprehensive platform that empowers investors and developers to streamline their property search, access valuable data, and make informed decisions.

For a full downloadable guide on how to buy in today's market, grab our Secrets to Buying Right: The ultimate guide to scaling your property business in 2024. Inside you’ll find a more detailed breakdown of the different approaches to buying property, a discussion about the importance of a focused strategy, and more on why a successful letter campaign is essential when buying off-market.

Once you’re ready to see Nimbus in action then our team would be delighted to give you a personalised demo so you can discover how the platform can help you unlock the full potential of your property investments.

*coming soon!