Benefits of buying buy-to-let investments at auction14.08.2017
Last year, Auctions Manager Nick Muston discussed why buying buy-to-let investments at auction is a win-win for landlords and tenants. Despite changing fortunes in the sector, the same can be said today. Property auctions have proved to be a go-to place for buy-to-let stock investors to snap up a bargain that they can often let straight away. Here’s why UK landlords should always consider the auction route to start or grow a portfolio.
It’s incredibly simple
Bidding at auction is notoriously hectic, and the whole process can be over in a matter of minutes. This may sound daunting if you’ve never bought a property investment at auction before, but compared to buying a home conventionally, the auction process is pretty simple. You won’t be caught up in a chain that you have no control over and there’s no danger of your winning bid being gazumped at a later date. Once the hammer lands, the property is yours. Contracts are exchanged in the auction room, and the deal is completed within 28 days of purchase. There’s no quicker way to buy a property.
You may pick up a bargain
A wide variety of property types are suitable for selling at auction. Lots range from versatile mixed-use properties that combine commercial uses with residential living spaces, unique propertiesand homes which require improvement that may be slow to sell on the traditional market and short or long-lease properties. This range creates a brilliant platform for investors to find a bargain and snap it up quickly, with the right lease type or tenancy status that suits them.
No one pays over the odds
Chances are, you’ll be competing against fewer bidders in the auction room than thousands of potential buyers online. You know who is bidding in the room and what they’re offering, so you won’t be caught out by any surprise bids down on the line. Everyone has an opportunity to bid in the auction room, but if you’re keen on a property you can place a high pre-auction bid in the hopes that the seller will accept your offer before collective bidding begins.
One of the most important benefits of buying your next buy-to-let investment at auction is the continuity of income. Every property is a big investment, so receiving rent while the sale is taking place is often crucial. We recommend that landlords sell with tenants remaining and offered as tenanted investments to ensure income continuity for the next buyer of that property. Landlords don’t have to spend time and money marketing the property to new tenants, who can stay put in the property without any disruption. A win-win.
5 pre-auction preparation tips:
- Register your interest on a particular property before the auction so we can contact you if the property is to be sold prior or withdrawn.
- Do your research. If a property is offered at a discounted price because it is not mortgageable, find out what steps you need to take to ensure that it is mortgageable.
- Set a limit. If the property is popular, bids can rise above a good return on investment.
- Obtain independent legal advice before bidding, and view the legal pack which can be downloaded free of charge from the Auction House Sussex website.
- Arrange auction finance in principle before the day.
Talk to our specialist lenders to discuss funding options
Financing an auction purchase is often highlighted as the biggest barrier for many buyers. Due to the speed of buying any property asset at auction, setting up a traditional, high-street mortgage can often fall short of the on-the-day deadline. That’s why we’ve teamed up with three specialist lenders who can provide the short-term loans you need for buy-to-let portfolios for any purpose. They consider a wide variety of property types for mortgage, remortgage or second charge secured loans, so get in touch.
Find your next investment with Auction House Sussex
Join us on 7th September at Clarendon Villas Church in Hove from 2:30pm to bid, buy or simply watch the auction process in action for free. If you can’t attend our next event, click here to view our full event calendar for the rest of 2017.