Benefits of Buying Your BTL at a Property Auction
Buying at auction isn’t for everyone, but if you are considering it, then take a look at why we think it could work for you.
• Auctions are a popular platform for renovation and probate properties. While they often require a lot of work, they also give you the chance to create the perfect rental property for the area and your profit. Remember, it’s almost always cheaper to buy a property cheap then renovate and improve it yourself. Where others have done that work, they expect to recoup their investment and it shows in the price.
• Speed – auctions are a quicker way to buy a property than the more traditional way via an estate agent. A typical time frame from the date of the auction to you picking up the keys, is 4 weeks. That compares with anywhere from 12-20 week, when you buy elsewhere. The reason for that is due to completion of much of the seller’s paperwork ahead of the auction. That allows the deposit and initial contract exchange, to happen on the day you make your winning bid.
• Transparency – everyone in the room knows how much the property sells for. In addition, the buyer must pay the deposit on sale day. That deposit then remains with the seller whether the sale goes ahead or not.
But, while there are some excellent reasons to buy your BTL property at auction, there are some potential pitfalls, too.
• Price – auction properties often go for much more than their guide price, so take care to stick to your pre-set high bid and not get carried away! Or, if a property doesn’t reach a price the auctioneer deems is fair, they can withdraw it. In these cases, there can be opportunities to strike a deal away from the sale room.
• Contract small-print – it’s essential to do your homework ahead of the auction and read all the contract small print. If you don’t, you may buy a property with restrictive covenants and locality rules.
• Speed – what’s works for some, doesn’t for others. If your BTL purchase is reliant on a mortgage that’s a little slow on the approval front, the short time frame can be a problem.
There’s Always More to Consider
As with all property purchases, there are myriad other details to consider when you buy your BTL property at auction. And in the end, what works for some investors doesn’t for others.
But, property auctions do offer a great chance to grab a bargain or buy the property you’ve always wanted to. That alone makes it something you should try -at least once!
Alessio Tondo & Fabio Tarantino
Two ordinary guys who turned their passion into a business.
Rent 2 Rent specialists, London
Focused on how to Increase Your Rental Income.