Buying Property At Auction – 10 Questions You Need To Ask Yourself

Property at auction always looks like a bargain, there’s no denying that. With average savings of 30% on market value, why wouldn’t you be interested? Unfortunately not all property at auction is the bargain it initially seems to be though, so ask yourself the following questions before making your bid.

 1. How long has it been since someone lived in the property?

If the property has stood empty for a good length of time then it could have damp or rotten woodwork that isn’t instantly visible to the naked eye. It is advisable to take a builder with you when you visit the property to check for structural problems.

 2. Is the double glazing completely sealed?

If the property already has double glazing then it needs to be sealed, otherwise it is no more economical than single glazing. If some of the windows have ‘popped’ they will need to be replaced, or at the very least resealed and this is an additional cost you’ll need to factor in.

 3. How efficient is the boiler/central heating system?

Private rental properties are rarely advertised without an energy efficiency certificate these days because tenants can use them to estimate their fuel bills. Some property at auction will already have this certificate so use it to determine whether you will need to replace the boiler before putting the property on the rental market.

 4. Will I need to replace the kitchen or bathroom?

Tenants like a nice kitchen and a nice bathroom but it’s unusual to find property at auction that has both. Be prepared to replace one of the other and get quotes for both.

 5. How much redecoration does the property require?

Is the property in need of major redecoration i.e. walls, ceilings, doors, carpets etc. or will a bit of neutrally coloured paint do the trick? If the budget needed to redecorate exceeds all other costs then the property may be more trouble than it’s worth.

 6. Does the garden (if there is one) need a lot of work?

The same applies to the garden. If it needs major work then it may be an expense too many.

 7. How long will it take me to make the property rentable?

As a buy to let landlord you need to buy a property at auction that you can turn around and get onto the rental market within 3-4 weeks. Anything longer than this and you start to lose money in lost rent.

 8. Is it the kind of property that will attract tenants quickly? (location, local area)

Is the property’s location good? Are the local facilities adequate? What about the transport links? It’s all well and good buying a great property at auction but if you can’t get tenants you’re never going to be successful.

 9. Will I be able to rent the property for an amount that will give me a positive cashflow each month?

Research the average rents of similar properties in the area and make sure you’ll still have a positive cashflow at the end of each month. Don’t forget to take into account your mortgage payment, your landlord insurance and any loan payments you need to make on finance that you took out to renovate the property. 

 10. Overall, is the property a suitable buy to let investment?

Do you save at least 30% on the market value? Can you get the property into a rentable condition quickly and cheaply? Is the property the type of thing tenants will be looking for? If you can answer yes to these questions then you’ve found yourself a good buy to let investment.