Buying property at an auction can be a very profitable investment, but only if you do it right. According to estate agents in Leeds, the key to making money from a property you buy at an auction is by doing your research, thoroughly. In order to make a profitable investment, you need to understand the market trends, do your due research about the property and figure out local property prices to figure out which property to bid on. If you are thinking of attending a property auction, here are 5 strategies to make more money from the property that you buy at an auction.
1.Know the market
You need to have a fair understanding of the property market if you want to make money from a property at an auction. Before you bid on any property, do your research about the average property prices in the area and you can even hire a surveyor to thoroughly inspect the property. This will let you know if the property has any red flags and it will give you a fair idea of the value of the property. Now, when you decide to make a bid, you know the approximate value of the property as well as the resale value of the property, which will allow you to close the deal at the lowest possible price. Then, when you do decide to sell the property in the future, you will be making a profitable sale.
2.Stick to your guns
The second strategy to make money at an auction is to ensure that you stick to your guns. That means, figuring out your budget, knowing how much you want to spend on a property and fixing a ceiling limit. While bidding, be sure to stay calm and composed; do not make any irrational bids based on emotion or competition. If the bidding amount crosses your budget, stop bidding. If you win a bid at a property auction by exceeding your budget, you are atomically going to reduce your profits.
3.Find unusual property types
Let’s say you are attending a commercial property auction; most bidders there will be looking to find the best commercial property to invest in. If there is any residential property that is up for bidding at this auction, consider this your golden ticket. Basically, you want to look for unusual property types at an auction as the competition will be low. If your fellow bidders are there to snag a good deal on a commercial property, odds are that you might be able to bid on a residential property at that very auction for a very low price. By finding an unusual property type at an auction, you may be able to buy a property at a price that is much lower than market value which will certainly ensure a profit when you decide to sell the property.
4.Get in touch with the owners of unsold lots
Not every property is sold at an auction. In fact, almost 25 per cent of the properties that are listed in an auction are usually unsold. Now, if you think about it, a seller who is trying to sell their property at an auction is essentially trying to sell their property quickly. If you find an unsold property that you like, you can get in touch with the seller directly. Since he or she is probably looking to make a quick sale, you might be able to strike a deal that is lower than the asking price. Now you have a property that you will definitely make money from in the future since you paid less than the original asking price.
5.Start bidding low
The job of the auctioneer is to get bidders excited in the heat of the money to really increase the bids. But, in order to be a smart bidder, you need to bid slowly. Instead of upping your bid by a whopping £10,000, increase your bid by increments of £1,000 or £2,000. Other bidders will probably follow your lead and increase their bids by smaller increments too, so the final value of the property will not go up too drastically. By doing this, you might be able to seal the deal without going over your budget!