The demand for auctioned properties has been increasing over the past few years due to their affordability and competitive prices compared to other methods of property acquisition, such as private sales or public estate agent lead sales.
Therefore, it’s important for everyone to know what auction houses such as Barney Estates & Auctioneers have to offer when it comes to the actual types of properties auctioned.
Properties which require renovation
Often residential properties that require major renovation can often be found in property auctions.
Given the difficulty of actually valuing rundown properties due to the broad level of repairs required, their value can often be envisioned by taking into account their end result (what the property is worth after works have been completed, excluding renovation costs).
You often find professional builders, professional home flippers or DIY home enthusiasts who often buy these types of lots.
As with any property, it’s important to always assess the property in person, as well as doing further due diligence before bidding lots. As well as pre-planning your finances, if the eventual goal is to repair and resell for profit — given you’ll need to consider your bid in line with your repair costs.
Properties in limited areas where demands are high
Properties located in popular central locations or perhaps close to an academic catchment area tend to have higher demand and therefore higher competition.
These types of properties can perform well in auctions, as buyers are willing to pay more for what the property is actually worth, given the locational supply and demand.
You won’t only find buyers who intend to live in these types of properties bidding for these lots. However, you may find buy-to-rent buyers too, given that the rental yield on these properties can often match the supply and demand pricing values too.
Properties between multiple neighbouring landlords
If more than two neighbouring landlords want to expand their property line, a property in between these neighbours can certainly lead to a bidding war, where one buyer outbids the other.
The value of the lot doesn’t necessarily come from the property itself, yet it comes from the possible value of the neighbouring property, paired with the lot itself (as one larger property) — which can not only be seen as a higher value altogether but also a larger property for the buyer to reside in too.
This doesn’t necessarily have to work with just brick-and-mortar properties only, as you would have the same effect with parcels of land too.
You may find farmers who are not ready to sell their land to developers, leaving the developers no choice but to build around their farmlands. Then eventually, a farmer wants to sell their land — which would have likely increased in value, with multiple buyers now interested to buy in the pre-established area, which pushes up prices further.
This scenario again can cause a bidding war, as the parcel of land isn’t just valued for what it is, it’s valued for where it’s in between.
Unique properties where the value is difficult to assess
Properties which are unique or hold historic value can often be seen in auctions too, as their true value is often difficult to determine through any traditional building valuations.
Therefore, these properties paired with unique or historical significance can come with their own premium.
If you want to learn more about other types of properties offered within property auction houses or perhaps want to buy or sell through an auction yourself, get in touch with our team today.
This article is purely speculative and should not be mistaken for financial advice. Readers should consult a professional independently before making any financial decisions.