A growing number of companies are lately set up aimed at helping cash rich investors to acquire BMV, or Below Market Value properties. These properties can be from developers in serious financial difficulties.

Some times these properties are from owner occupiers wanting to straighten their finances or from people in a hurry to sell. These reasons could be death, relationship difficulties, moving abroad or any other reason.

These companies find these sellers by placing adverts in local papers or on Internet. Some times these companies track the sellers down from hearing lists available at county courts.

Not all types of properties are right for all types of investors. Most investors stick to their investment strategies. In other words, some people prefer properties in areas with high capital growth potential and other investors prefer properties that produce maximum rental yields for the price paid.

“Long-term, big family houses are a good prospect for capital growth, as they are in short supply,” says Yolande Barnes, director of research at Savills estate agency. “But they tend to have lower income streams attached to them, as there is a limit to what people will spend on rent.”

Gary McCausland, a property developer says, “for rental investments, the best locations are the city peripheries. In London, this is west Kensington, Clapham, Camden, Stockwell.”

However the properties with high yield are often local authority flats. They can typically yield between 8-12% depending on location. Many in London can even offer good capital gains too.

Many investors prefer the best of both worlds. so the companies try to find the ex local authority properties in high capital growth areas for these cash rich but time poor investors.

For precise targetting, insiders suggest to go after areas to which young celebrities are moving. It used to be Chelsea, then Notting Hill, then Primrose Hill in London. Now it’s Clapham, Balham and Camden.

However by the same token, areas with oversupply of properties should be avoided. It would typically be certain parts of Manchester, Leeds, Nottingham and Cardiff where far too many flats were built in recent years without consideration for long term demand.