Repossession Property – Choosing for Buy to Let Purposes

The current economic climate has meant that repossession property is no longer hard to come by. The perfect repossession property for buy to let purposes is though.  Very rarely does a decently priced property come up at auction that needs virtually no cosmetic or structural work doing to it, so in order to secure tenants quickly you need to compromise between price and property condition.

The Compromise

Repossession property can sometimes be bought for upwards of 50% less than its market value but in order to make these kinds of savings you need to be willing to put a lot of hard work into renovating and redecorating. Properties for sale at these prices will sometimes have been stripped of all fixtures and fittings, vandalised and even used as squats since the homeowners moved out. It can take many thousands of pounds and months of work to get a poor condition repossession property into a rentable condition…and all the while you are working on it you aren’t receiving rental income.

It is often a much better bet to go for a good condition property that only needs cosmetic work i.e. painting, decorating and carpets, and maybe a new bathroom and kitchen. Of course you will pay more for this type of property and it may be that you only save 20 or 25% on the estimated market value. You won’t need to put in half as much cash to renovate the property though, plus it should take you a few weeks at most to get the repossession property in good condition and rented out.

Location

The location of your repossession property can also make it a perfect or less than perfect choice for buy to let purposes. You may make a great saving on the purchase price and then find that very little needs doing to it in order to get it on the rental market but if it is in the wrong location you might never get the tenants you’re looking for.

Before choosing a repossession property consider what type of people you want to attract e.g. singles, couples, families etc. and then decide what amenities and transport links these people are going to need. For example, families will need to be close to supermarkets, public transport links, schools, doctor’s surgeries and libraries, but young couples might prefer to be close to restaurants, bars and clubs.

Once you decide on the type of tenants you want, the type of property you want and the ideal location then you can search for repossession properties that fit the bill.

Any repossession property can ultimately be used for buy to let purposes but the idea is to purchase one that you can have on the rental market within a month at the most. You might have to compromise on price to get a property in decent condition but if it means you start making a profit straight away then it is certainly a compromise worth making.