Morning to you all. I have often wondered about properties that are listed with a ‘guide’ price’ and what the procedure is with regards to making an offer either prior to auction or at an auction, so I thought id look into it and share my little gem of knowledge with you all.
This particular property really interests me, and I have been advising a lot of our landlords to seriously consider it…for the simple reason that properties of this ‘type’ rarely come onto the market. When I say ‘type’ I mean the large 3 bedroom side entry Semi detached properties on streets such as Norman Avenue and such like.
Granted this house needs substantial work done to it, but again, if you are in the buy-to-let business you may have contacts who can carry out the work at a good price for you, be it a residential door replacement the house needs or a change of water fixtures. However, if you are new to this, feel free to get in touch with us as we are lucky over the years to have made some very reliable, reasonable contacts within the building/home improvement business. For example, if your new property has leaky or damaged roofs, you can contact a relevant service provider for Roof Replacement before moving to the new property. Similarly, you can look for other firms for repair, home addition, and replacement purposes.
Back to the property itself… it is listed with Pattinson Auction with a guide price of 75,000 and due to go to auction in Leicester on April 14th. I spoke with Pattinsons this morning and was told that it is possible to make offers prior to auction which would be presented to the owner, and that so far 3 offers had been made, the highest being at 89k. Interestingly though, any property that is due to go to auction, that then receives an accepted offer prior to the auction date will pay the price for such privilege. That price being a reservation fee of either 5% of the accepted offer, or 6k including VAT ( 6,000 being the minimum fee)
So, say you call up and make an offer for 90,000, this will automatically mean you will be paying 96,000 for the property to include the reservation fee. You would be looking at spending anywhere between 10,000- 15,000 on modernising the property, if we go with the higher figure of 15k it’ll mean your total spend on the property would be 111,000. Of course, there are many ways you can reduce the costs of the home improvement part of this property flip – from doing the work yourself to save money on labor to going on Raise to find coupons when you’re buying materials for the project – so you will likely be able to cut costs if you plan ahead and are smart with your money.
You would be able to get 700 a month rental income off this property once it is finished, and this would give you a nice yield of 7.57%. Not only that, but the value of the property would increase substantially after the modernisation, and the way the property market in Nuneaton is going, within 18 months you will see a substantially higher return on your investment.
Fell free to pop in and see us if you would like any more info on either this property or any other that may have taken your fancy for buy to let purposes, we’d be happy to advise.