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Cost versus Value

01/07/2010

Cost vs. Value

Property people get very excited about cost and value. You don’t have to look hard or far to find the next big thing, promises of untold riches, No money down (or in) deals despite recent changes in lending policy.

The terms we associate with this industry are usually OMV (Open Market Value) BMV (Below Market Value) NMD (No Money Down) and many, many more. However, these terms are used and abused to suit the aims of people with a variety of intentions, not all of them entirely ethical and some downright incredible!

They are bandied about far too much these days. In a recent forum thread started by my friend and mentor, Vanessa Warwick on Property Tribes entitled “Anyone else jaded by the term BMV?” Vanessa has questioned its use and relevance in the world of property investment and received some interesting feedback in response.

There is a simple thing that all of us need to remember

VALUE is not what somebody has paid, that is COST, VALUE is what someone would be prepared to pay”

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