Property Auctions – What To Look For

The properties commonly sold at property auctions range from top quality family homes to virtually derelict flats and basements. Most properties fall in between these two extremes though, and these are the properties you should be looking at for buy to let purposes.

On the one hand you don’t want a near-perfect property that will only save you around 10% on the market value, but on the other hand you don’t want a property that will require many thousands of pounds spending on it to bring it up to a rentable condition. If possible you want to scour the property auctions for affordable properties with the following characteristics.

 1. A Sound Structure

Taking a builder or surveyor with you when you visit properties prior to auction day will help with this point. Alternatively you can find out from the auctioneer if the previous owners had a recent mortgage on the property. If they did then the structure will almost definitely be okay as no mortgage lender would lend on a property that didn’t meet their requirements.

 2. Central Heating

This may sound silly but it is a lot easier to rent out a property if it has central heating. If it doesn’t have adequate heating you should get a quote from a heating engineer for the work before the auction, just in case you end up needing a new boiler at the same time. A lot of repossessed and inherited properties sold at property auctions will be lacking central heating so consider this cost when deciding what your maximum bid will be.

3. Double Glazing

Again, it is much easier to rent out a property with double glazing than it is a property with old-fashioned single glazing. If the property does have single glazing ask the auctioneer if there is a reason for this e.g. listed building, heritage site etc. If there is no reason then, again, get a quote for replacing the windows and doors prior to the auction and factor in this cost as well.

 4. The Necessary Amenities

As mentioned above, some properties sold through property auctions are in need of severe renovation. This isn’t the same as modernisation so if a property is advertised as needing modernisation it is still worth looking at. You might need to replace the kitchen, bathroom and carpets, plus do a bit of decorating but all of the essentials i.e. plumbing, pipework, electrics etc. should all be present. Again remember to factor these costs into the overall price so you don’t end up paying more in total than the property is worth.

 5. Location, Location, Location……..

This may not seem too important compared to the other points on this list, but buying cheap property from property auctions is pointless if you can’t attract tenants…and a good location is one of the main things that tenants consider when applying for a tenancy. Yes, once they visit the property they will want everything mentioned above but you have to get them to visit the property before this becomes important. Research the local area, the transport links and the public amenities (shops, schools, restaurants, library etc.) before deciding an auction property is a bargain buy.

It may take a few property auctions before you find suitable properties and you can be sure you won’t be the only one interested in them. If you keep your head at the auction though and remember your maximum bid you’ll hopefully get a decent property without breaking the bank.