Property investors often either purchase property ‘to do up’ at auction, or buy houses to rent out – called buy-to-let.
If you’re new to either of these processes, they can be a little daunting, but they don’t have to be; you just need to know what you’re doing.
Buying at auction can be exciting and intimidating, so try attending a few property auctions without actually bidding for anything.
Familiarise yourself with the routine, the pace at which individual lots are dealt with, and particularly with how accurate the guide prices are.
You might also want to try a few different auction houses until you find one you like – or one with the types of property you are most interested in.
When it comes to actually buying, you’ll need to have your finances arranged in advance, as you might be committed to putting down a sizeable deposit on the day, and paying the remaining balance soon after.
This is part of the appeal of auctions – unlike a lengthy estate agency process, you can buy a property and genuinely own it within anything from a matter of minutes to a few days later.
Property investors who are several properties into their career are often more likely to favour the auction house for this reason.
For example, if you are buying a house that has been gutted and left with no functioning kitchen, or no mains water supply, you might find it impossible to get a conventional residential mortgage on it.
At auction, with a few properties already under your belt, that same property could be yours outright, often for less than its true market value, leaving you with funds spare for the refurbishment.
The ongoing implications of this are simple – each property you own outright avoids a costly buy-to-let mortgage (which are typically more expensive than a mortgage on a property you intend to live in yourself).
And once you have collected a few months’ rent, you can quickly be on your way to affording your next investment property, whether you buy it at auction or through the conventional channels like estate agents.
If you have any questions about the above, please don’t hesitant to get in touch with our Conveyancing Team as we’d be more than happy to help.