The biggest take away for buying at property auction is:
- Research Research Research – Ensure that you have researched key elements
- Stick to your plan – Ensure after you have done your research you form your plan and stick to it.
What Buying Property At Auction
Key Takeaway of why you buy at an auction:
You purchase on the day and complete on average of 28 Days, some sooner and some longer
The average purchase time for non auction properties from time of listing to completion of the sale is roughly 6 months
Properties are often sold are below market value
Note: Research Research, properties can be bid to market or above market
Auctions are great for people looking for unusual properties that estate agents wouldn’t know how to sell. And, if no one else has noticed its potential, you could find a bargain.
But auctions aren’t just for the experts with insider knowledge – over the past decade they’ve become increasingly popular with buyers who want to avoid the traditional house buying chain. At an auction, the sale is agreed as soon as the hammer falls, so there’s no risk of everything falling through at the eleventh hour. And you see all the other bids as and when they’re made. So there’s no chance of being gazumped and there’s a lot less that the estate agent can hide from you.
1. Letting agencies and council backed guaranteed rent
In the market there are management companies in the market that will lease properties off landlords and off them guaranteed rent for a number of years. Note normally the rent rates will be below market value so understand the discount.
Typical advantages and perks offered
Disadvantages and restrictions to consider
In the market there are insurance policies that can protect rental income. We have laid out below some of the types of policies but you should do you due diligence and read the small print.
Rent guarantee insurance is a policy to cover rental income should tenants find themselves unable to pay their rent.
There will be conditions required to get the coverage, such as:
- Tenancy agreement in place
- Tenants have successfully been referenced
This should be seriously considered, as it takes on average 10 months to evict a tenant. Ask yourself are you in a position to take the risk.
Make sure the policy provides sufficient cover. Understand the maximum number of months and the total value of unpaid rent that can be claimed.
Additional perks of the policy could include:
- Legal expenses
- Access to solicitors
- Assistance in recovery if rent
- Assistance in repossession or eviction processes
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