We’ve had a lot of questions come in recently regarding property auctions properties, so we’re going to cover a couple of those questions today, specifically regarding how to tackle auctions, how to find deals and also if auctions are actually a good place to buy property at the moment.
- Can you still find bargain properties at auction and are auctions the best place to buy properties?
- You can buy ready-to-go properties that were already rented
- You can get brand new flats that have perhaps been repossessed or sold by banks for lower prices
- Sometimes auction prices go quite high, in comparison to what you might find at estate agents
- Types of properties available
- Who is looking to buy auction property?
- Where there is a demand – prices are high
- Where the best bargains are, properties that make good investments
- Understand which strategies you are going to use and which auctions might be the best places to find those properties
Hi, it’s Rob from Property Investments UK.
We’ve got a lot of questions come in recently regarding specifically auction type properties, so we’re going to cover a couple of questions for you now regarding how to tackle auctions, how to find deals, and also if auctions are a good place to buy at the moment.
Are auctions the best place to buy investment properties?
One of the questions we’ve had asked recently from a client is, can you still find bargain properties at auction, or really, are auctions the best place to kind of buy properties? Yes, you can get very good deals at auctions. It’s not always the best place to buy. Sometimes there are some problem properties at auction. We cover some of the problems when buying with auctions in another video, which we’ll link to below this one.
Good deals can be found at auctions
Typically, in terms of auction type deals, there can be some great properties at auction. It’s not just problem properties, let’s say with structural issues, or title issues, or that are completely knackered and falling down. You can get some very good deals at auction. You can buy ready-to-go properties that were already rented, have tenants in there at the moment, and produce a good rental income. You can get brand new flats that have maybe been repossessed, that are being sold by the bank at a lower price. You can pick them up for good prices, compared to what’s currently being sold, maybe by estate agents at the moment. Really, with auctions, it just depends upon how buoyant or active the local market is.
Sometimes auction prices can go really high, compared to what you might even see at estate agents, but that’s really dependent upon the local market, how much activity there is. Just go to an auction, get a feel for kind of how busy it is. The room should give you a good indication of that. You shouldn’t write off auctions, there are some good deals there.
Types of properties available at auctions
Typically when we’re looking at auctions, what we’re seeing at the moment is the types of properties that are … I suppose, more refurbishment type projects. They’re the ones, actually, that achieve the highest prices when it comes to comparable prices because you’ve got a lot of competition. You’ve got homeowners that want to maybe buy a property, do it up, and live in it. You’ve got investors that want to buy a potential deal to refurbish and then rent out, and you’ve also got developers or builders that are looking for their next project. Those types of properties specifically are very competitive at the moment. We’re viewing some recently, and there’s a lot of people viewing at the same sort of time. Where there’s a lot of demand, where there’s a lot of competition back and forth, the price will up a little bit.
Where the best buys are currently that we’re seeing in auctions are a bit more kind of, I suppose, straightforward type properties. Properties that were already in good condition, or properties that were already talented and can make very good potentials, because it limits the market somewhat. The homeowner isn’t going to be looking at those types of properties because they’re not ready to move into, because they’ve maybe already got tenants and that. A developer or a builder isn’t going to be looking at those types of properties either, because there’s not really the margin for them to add the value to it. It’s already good condition, it’s already rented. The main client base is going to be an investor. That’s where, if you’re an investor, if you’re looking for buy-to-let specifically, those types of properties can be good value. It’s just a case of understanding which strategy you’re going to use, and which auctions, as well, might be the best places to find those properties.
In another video, we’ll look at the difference between a local auction and a national auction, which ones might have the best bargains with the best potential.