How many people really understand their property investment area? Quite often they are told to go where the housing stock is cheap, offer below market value and build up their portfolio of buy to let houses. So off they go and put in offer after offer without understanding the local area and whether they’re in a buyer’s or seller’s market. So how can you find out if the property that you are interested in will potentially accept your offer especially if you are looking to put in a low offer? You can use easily obtained data to help you make an informed decision on your potential target property.

You start by looking at how many houses of the same type including the number of bedrooms that are within a ¼ mile radius of the property that you are interested in. This information can be found through the property search engine RightMove. Once you have this number write it down. Then within the same search engine, there is a tab called house prices, then from the drop-down menu select ’Sold House Prices’ then enter the postcode of your property. Then filter the information so that you are looking at property within a ¼ mile radius of your, and set the filter for sold in the last year. This will give you the number of houses sold, again make a note of this figure.

Now for some simple maths. Take the number of housing sold in the last year and divide it by 12 to give you an average. E.g. 36 houses sold in the last year, 36/12 = 3, then you take your current number of houses for sale and divide it by your average figure, e.g. 7 houses currently for sale, 7/3 = 2.33. This figure of 2.33 represents your current month’s supply of housing stock, if it is less than 6 then it is a seller’s market, so there is no point in you putting in low offers, because unless it is a stressed owner, the seller will know that their property will sell quickly at on or very close to the asking price. If the figure is 6 then it is a balanced market, so you have a 50-50 chance of having a below-market offer accepted. If the figure is above 6 then it is a buyer’s market, therefore you can put in a below-market offer with a good chance of having your offer accepted because the market has a lot more properties that are up for sale.

In summary, using data is the best way of making an informed decision that can make a big difference to finding the right area and property. You will not only save time but also money, therefore it is wise to spend a little time checking the data before adventuring out to put in offers.