Property Auction Strategies
for Investment Success
You need an overall plan that will provide you foundation
for future investment decision before you enter into auction
room. Make money in falling or rising market. Tactic usually
covers following area,
1. How much you can invest? How much you
can rise? How much you can make out? What you are planning?
In repayments every month how much you can afford to it?
2. Want a home for you and your family?
A bubble egg for retirement? Need a constant cash flow every
month? An epoch of severe work followed by a profit, which
can then be re invested for next project? Or what can we
do? What you actually what your property investment to create
3. What is the time scale for your planning?
For 3 months or 3 years, or 7 years? Be more specific; always
remain lithe with your approach as events open out.
4. Where to invest? Do you have knowledge which
needs to bargains? How to manage the property far
from your home?
Do you have anything regarding assumptions? Assumptions
such as how much the financing will cost, how much to spent
for renovation work, time taken to find out tenant and …?
This is the right time to get into specifics of identifying
potential properties, talking to letting agents, having
a meet with builders and surveyors, if bank ask you can
even show them an outline of your business plans, based
on your approach!
Damon Leigh’s Strategies co-author of Property Auctions
- Check out things is made easy for you and to get understand
easily. You don’t have all the information’s that you need
right! So get cleared you doubts right now, here is my approach
which we prefer. This will be a good model for all and helps
you a lot.
Context – This is the great and correct
time to get involved in property market. Cost of borrowing
is still close to a 40 years low. Regular growth in property
price is slowing but still thrashing the fairness markets.
There’s no symbol for crash in property market.Despite of
the trivial dips or hiccups that may come along the long
term, there are many drivers that will push the property
market still onwards.
Property demand get increase at the time of awfully low
supply, this happens because:
Trend for long-term starts from large households towards
smaller ones. If the population is moderately constant,
means more households.
Now days there’s increase in number of single households,
whether they are young people choosing to stay single longer,
or elder ones or single parents or divorcees etc…. people
who prefer living longer and property is reasonable for
a widen section of the population because:
• Money borrowing is very cheap
• Broad availability of credits
We go for two parts to take up the maximum advantage of
all these conditions,
The Long-Term Play – This simply avoids short-term market
dips and interest hikes that come along for next twenty
or thirty years, and point out on building a retreat portfolio
which is extreme strong than anything the government, or
annuity provider could offer in this environment.
The Short-Term Play – it helps to take out the cheap money
that’s available in today’s market and go for maximum investment.
The Short – Term Approach – Have you hot cash ready? Then
prefer in short term approach where it is fast and furious,
buying and selling them in easiest way, making modest profits
on each one. Want the best then point out your views on
Competition is greater in London than anywhere else. Allsop’s
are currently getting upwards of more people at each of
their London sales, according to Gary Murphy, their residential
auctioneer. But on other hand the competition is not good
and may drop out for non-London properties. We looked for
properties in my own areas of interest we prefer north of
England. But frankly speaking London auction buyers are
interested in properties of south east only. Keep in mind
the competition on northern properties are quite light.
And also the northern property market won’t be shared by
other bidders in the room. But we prefer to bid the properties
where there is less competition. Two factors helped a lot
1. Once Property is been bought, it will be sold out immediately
through an auctioneer in the north, close to property area.
2. The Buyers there will be looking for local properties.
Here we have set the guide price at a level similar to
price list in the London sale, so have a look at it and
you will get an idea on prices list. Make out very healthy
income by fixing appropriate prices on every property for
fifty properties a year.
The Long-Term Approach - Here we buy two properties at
auction. Prefer to buy at discount to market price, means
that they have sitting tenants. So it saves time from finding
out new tenant! Or it means that there’s a need of property
modernizing or renovation in such cases there’s need of
renovation funds too.
These properties cover the mortgage repayments and then
some. Repeat this for next year. So one can raise the deposit.
Later this approach becomes self-supporting.
Instead of remortgaging my own home, we start to do with
investment properties i.e. property bought in year 1. This
provides me surplus amount of money and so my domain grows
day by day. Provided that we never sell properties, no need
for capital gains tax, no need for children to pay inheritance
tax, all you need to do is proper planning. Move your pension
funds under self-invested personal pension for tax-efficiency.
Later we can use this money to buy commercial property investment
that will assemble within my pension, and so free form tax.
Consultant Auctioneer – There are simple
strategies that are understandable say buy residential property
below market value, renovate it and sell it on. Even amateurs,
who are gripped by television programs, go for renovating
a property and sell them at profit. They all of sudden they
are property developer!
Deemed Consent – Have you realized why
large site developments seem to take longer time? When planning
permission is granted the appropriate authorities have been
notify, and work does finally start and then Developers
have permission to stiff advertising hoardings around that
site until the work is finished for two years, or even sooner.
There are many advertising – Hoarding companies
which will seriously pay amounts of money get their hoarding
on sites for at least two years.
Mark up and Sell on - Now a days there
are growing number of professionals who make use of auctions
for selling than buying. They buy more property as their
finances permit within their area limit. They buy the property
form local estate agents, or make use of other methods like
newspapers to buy for hot cash, advertising etc… these properties
will be sold in auctions for higher rate.
Often now a days people are carried by auctions, this is
been a common phenomena in northern side, where there are
cheaper rate properties prevailing. Buyers are not worried
about the research the local estate agents to get the average
market prices for the area. They taught it is in auction
so it might be cheap. Not so. As a buyer you can never research
your target properties enough!