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10 Golden Rules, How to make money from UK property auctions |
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1.
Identify undervalued properties |
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Property auction zone allows you to search different types of
property in the UK and has links to the land registry and
houseprices.co.uk. By clicking on the land registry icon you will
find the average value of the property in that area. If the guide
price is below the average value e.g. if a two-bed roomed terrace in
Bolton in the BL3 area has an average value of £65,000 but the guide
price is shown as £40,000 then this highlights a potentially
undervalued property by £25,000. |
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2. Take a survey of the
area |
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Once
you have identified an area it is essential to view the property at
various times of the day. Along with this conversing with neighbours
will help you gain general impression of the area and highlight any
issues. |
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3. Get in touch with local
council planning department |
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Get in
touch with your local council planning department and enquire if
there are any developments in the area e.g. are there any compulsory
purchase order. |
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4. Consult a surveyor |
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The
next step is to consult a surveyor who will give you an idea of
structural faults and cost of repairs – if too high avoids buying
the property and in any case factor the cost into the price you are
willing to pay. |
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5. Search for any issues |
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Carry out searches and these can be done freely at your local
council offices or let your solicitors do the work. This can
highlight issues which need avoiding. |
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6. Get your finance ready |
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Get
your finances in order. A deposit of 10% is needed for the property
at the auction. Finance can be obtained from specialist finance
houses and bridging loans are also available (be warned they are
expensive!). Completion dates are typically within 28 days. Ensure
you are able to complete within that time frame or risk losing your
deposit or incur interest charges. |
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7. Buy with caution |
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When investing in property always buy with caution as the rental
income is not guaranteed e.g. ask yourself, how easily can you get a
tenant into that property? |
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8. Order a legal pack |
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Order your legal pack from the auctioneer and pass it onto your
solicitor. |
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9. Insist on buying property from
auction |
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In
the current market avoid buying property before going to the auction
as you will inevitably end up paying too much. |
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10. Don't bid above your range |
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When bidding at auction set yourself a target price – don’t go
beyond it, no matter how temping it is! Otherwise you will end up
paying in excess and rendering your homework to determine the target
price as futile. |
