I was contacted by a landlord the other day who asked me some advice on a property he had seen that was due to go under the hammer.
Its a 4 bed semi detached property with a guide price of £187,000. Picture below.
Everyone expects an auction property to be a bargain. With the infamous 'Homes under the Hammer' TV program suggesting that we can all make money by going to the auctions.
Well, I did some further investigation on behalf the landlord. This property is an ex HMO (House of Mulitple Occupancy) used by doctors and nurses at the nearby hospital.its in reasonable order needed new carpets and some light redecoration.
However looking at the legals that came with the property there was an interesting development. Part of the land that the property is sited is in the process of being sold. Which would suggest for further development. If you bought this property there would no doubt be some disturbance for several months while building work is being undertaken.
So it a bit of a downer in my view.
The property last sold in 2013 for £144,000. Part of the land is in the process of being sold for £45,000.
Buying at auction you need to complete within a month, which can be a bit stressful as you are at risk of losing 10% deposit if your unable to finance the rest of the monies in that time. So generally its cash buyers only and therefore you would expect to get the property at a discounted price.
The guide price seems a bit on the high side when you can compare other 4 bed properties in the area. So my advice to the landlord was to look at other properties in the area around the same price range as there were better buys than this investment in my view.
The property reached a bit of £192,500 at auction, but was unsold, the buyer is looking for £200,000.
This is the property in question.
Examples of the similar properties in the area.
If you want some advice and opinion on where (or not) to buy, please email at email@example.com