12th October 2015

Adore Cardiff’s 7 top tips when buying a property at an auction.

Adore Cardiff’s 7 top tips when buying a property at an auction.

 

1. First and foremost do your research. Ask local agents, visit property websites and talk to friends, family and even locals about the area you are interested in. You need an understanding of property prices, price ceilings, demand for property in the area, potential refurbishment costs and likely yields in order to make an informed decision. From the outset you should be thinking “What do I want from this property? Will I sell it on immediately, will I live in it or will I rent it out?”

2. Do the maths! This applies whether you are looking to rent the property out or sell it on. There is nothing worse than having purchased your property project, you realise you have underestimated refurbishment/ ongoing costs. This may not only mean you have overpaid for the property but could leave you in financial difficulties as the cash runs out. Many buyers have ended up cash strapped with a property that can’t be lived in or used to generate an income through renting as it is unfinished! Find out how much you can afford to spend, set a realistic refurbishment budget and add in a comfortable contingency margin to deal with any unforeseen problems.

3. Have a price limit & stick to it – auctions are an unfamiliar environment to many and even the experienced auction-goer has been known to let the excitement and heat of the moment get the better of them! If this happens you risk overpaying or overstretching yourself. Have a price limit and do not go beyond that. When bidding on the property be calm and patient; you don’t want others in the room to know how much you want the property, they might think they’re missing out and join the bidding war!

4. View the proeprty beforehand AT LEAST ONCE preferably with a professional surveyor. The last thing you want is to find your investment has a major subsidence issue that is going to cost a fortune to rectify! Investments should make money, not cost you money!

5. Agents can provide some inside knowledge on a property prior to auction. If it doesn’t go on to sell at the auction, they are also more likely to contact you to see if you would like to make an offer. Inform the agent in advance so they know you are interested

6. Check the legal pack (ideally with a solicitor) before the auction to ensure you are fully informed about what you are taking on in purchasing the property. Restrictive covenants, easements, head lease conditions, prospective planning permissions and obligations around permissions are just some of the issues that can affect your property, its value and even its use.

7. Whether you are buying a property to sell on or rent out, remember it is an investment. With this in mind, any refurbishment work should be undertaken with the end goal in mind to achieve what you want from your investment. Don’t refurbish to your own taste, tailor the property to your target market whether they are first time buyers or renters. Luxuries such as Jacuzzi bath tubs may seem very nice but can dramatically eat into your profit margins when basic finishes are often sufficient.

 

If you would like any advice on buying at auctions, refurbishment standards or buy-to-let properties get in touch with Adore Cardiff today on 0300 5000 601 or email hello@adorecardiff.co.uk . We work with first-time landlords through to professional investors, managing properties from Newport to Barry from our head office in Canton, Cardiff.

We offer a 100% transparent, 100% Honest and fiercely competitive lettings service with a conscience- 100% of our profits are re-invested into the local community. Get in touch today to see how we are “Improving the reputation of the lettings industry, one satisfied customer at a time”

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