OpenRent Community

Buying Property at Auction to Rent

Originally published at: https://blog.openrent.co.uk/buying-property-at-auction-to-rent/

Purchasing properties at auction to rent has two significant benefits for the landlord. Firstly, in the great majority of cases, you can buy property cheaper than by going down the traditional estate agent route. Secondly, it’s so much quicker, with no lengthy sales negotiations and chains that can collapse at any moment. While there are…

1 Like

No one ever mentions the auction fees you pay on top of the price,has anyone bought at auction then been shocked by these hidden fees?

2 Likes

Yes !

Had to pay auction fee on top of purchase price and then the legal costs of the seller on top of that. Did the conveyancing myself so saved a few hundred on that.

More fees to sell. Auction fees plus another £250 on top to Auction House just to upload Legal Pack!

£250 to solicitor to prepare Legal Pack.

Because there was a Head Lease another £750 for them to change the name.

2 Likes

not a lot of fees the end reward when we sold on was great. Think long term and its tax deductable

the modern method as it is called is a RIP OFF the fee is generally much higher than at a traditional auction. I have put in cash offers before an auction and been very happy… when I see Modern Method I think. they are not going to get my money… I dont consider it at all… and I have done very well with pre auction offers

2 Likes

I have looked into the additional fees payable by the buyer and apparently the actual cost is “vague”.
Yes that’s the normal amount, it’s a standard auction term as in “there will be a vague amount of buyers fees”
How much exactly? Well no one knows how much in normal terms but I am guessing “vague” is a secret code for a lot more than your expecting! :wink:
Apologies for not supplying exact figures but it seems to be every auction house and every auction property has it’s own very specific fees
on top of the hammer price.
Clearly, there are deals to be had (thanks Colin)but buyer beware.

1 Like

Am sure you are correct that it varies between auction houses and probably more information in the small print.

Think Buyers are usually responsible for Sellers legal costs but Sellers are responsible for the costs of their own Legal Pack! So can be confusing and unexpected if not familiar with the process.

However, we did state that the Buyers would be responsible for our Legal Pack too so there might be some room to negotiate a bit.

1 Like

As long as the property is in a good state of repair because you are not allowed to improve a bought property & claim the expense.

Tracy 11 …I bought a property that was in two flats and had a good c h system, 2 good bathrooms, 2 good bathrooms and could have been rented out right away… I wanted to put in a skylight, borrowed lights, further insulate it take out partitions and turn the stairs around and put in an en-suite Etc. The accountant said ,well if it could have been immediately rented out. . we can immediately claim all the material expenses against tax … He did so. on the other hand I bought a property with a huge crack in the back wall, we stripped everything out, new… foundations ,drains replastered. The whole works… if we were to rent out we could not immedately set it against tax, So we sold on and set against capital gains

I don’t agree with your accountant. But I’m sure things may have been worded differently there are ways around it.

I’m an accountant btw

Thats life… different builders, accountants ,Lawyers , this landlords blog …everone has a different opinion all all think they are right.

Buying at auction cheap is never the case, prices are advertised cheap to attract more people. Never put ur hopes on buying cheap houses at auction.

1 Like

It’s about £900 at the auction I go to, but I’ve seen others with about £4000 in fees.

(This is for properties valued around £40000)

1 Like