While the property market has stuttered in recent years, the savvy are still buying property to let at auction that provides them with a good return on their investment and, with landlord insurance in place, a decent rental income.
Bricks and mortar are still considered one of the best long-term investments and although the days of incredible short-term returns on houses and flats are long gone, those investing in buy-to-let properties are generally in for the long haul and can expect slow but steady growth in their investing.
The buy-to-let market has also retained some of the buoyancy that has left the rest of the property market because demand continues to grow for rental properties.
One advantage to buying at auction is that you may be able to pick up the property for less than its market value, thereby maximising the opportunity to make money quickly from rental.
Many houses and flats now being sold at auction are repossessions which usually do not require any renovations or major work done, so as the landlord, you can get the property on to the rental market as quickly as possible.
There are, of course, also pitfalls to buying a property to let at auction, as many will require refurbishment, so it’s a good idea to sound out tradesmen beforehand to make sure they are in place if required to go to work.
You will also have to have the finance ready – auctioneers require a 10% deposit upfront and the balance is usually payable within 28 days.
However, before doing so, it’s important that you be prepared to invest in specialist insurance for landlords, which is essential for landlords who want to protect their investment – ordinary household policies generally don’t provide cover for a house or flat that is being privately let.
You will need buildings insurance that covers you for any damage to the fabric of the building and contents insurance if you intend to let the place fully furnished, and you can also add cover for loss of rent.
Landlord insurance will provide peace of mind for buy-to-let landlords looking to add to their portfolio by buying at auction.