What is property sourcing?
Property sourcing is the activity by which property deals are negotiated and packaged by a property sourcer, to then be sold on to a property investor.
3 min read · 24 Mar 2022
Property sourcing is the process by which deals are found, negotiated, and presented by property sources, which are then sold on to a Property Investor for a fee. A property sourcer will look for suitable properties that have the potential to make money for an investor. They can also do the leg work in terms of agreeing with a sale price with the vendor as well as sorting all the terms and conditions of a sale.
Many investors choose to use a property investor, but others don't feel it is worth the money, or the properties offered represent the value they are after.
Is using a property sourcer right for me?
That depends on your time, finances, and ability to find your own investment properties. If you are short on time, but have the finances - they can be a great option. If you the time on your hands, and want to save some money - there are now the tools out there to source properties yourself.
You'll be looking to pay a minimum of £2000 on any sort of professional property sourced deal, and from our research this is generally at least £5000. Expect to pay more on larger deals.
Where to find property sourcers
There are now many companies offering property sourcing services on the internet. A simple Google will allow you to see many. Check their reviews, and how long they've been established is our advice.
What makes a good property deal?
First and foremost, the price. People are ideally looking for a good sale price of the property. This will be in relation to the local market. Nobody wants to pay above the going rate (and below, if possible!). The yield will also be considered in conjunction with the price - how much rental income can they can for the price paid? Some investors aim as high as 10%, but generally achieve lower. In areas such as London it will be much lower, 5% is considered high there. Investors have achieved higher than this but these are the rare cases, and often involving HMO's.
There are many factors to consider - expected capital increase (house price going up), rental demand (can effect how quickly a property rents out, and if you can increase the rent), refurbishment costs (if any), maintenance costs, leasehold fees (service charges, etc if it is a leasehold property).
The yield is a good way to judge an investment, and the common way.
Find your own properties
Many investors choose to find their own properties to invest in. This saves money, and gives them a better idea of the market and the area they are investing. Searching property listings sites is one way. The below are the popular listing sites
Facebook groups are also a way to see what people are offering (expect to see a lot of humorous questions being asked in these)
If the above feels like a lot of work, PropertyWisdom can help you source your own properties. As we trawl the entirety of property listing websites, we can identify the best investment properties by looking at expected yield, and also providing rental demand in an area, as well as average sale prices to give you all the data needed to find the best investments out there. This ultimately will save you countless hours and calculations - we know after trying to do this manually in the past.