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Homes Under The Hammer. Property Investment @ Auctions!. Why invest at auction?. £150,000+. Why invest at auction?. http://www.eigroup.co.uk/. Why not to invest at auction?. After a successful bid. Risk. Costs. CASE STUDY:
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Homes Under The Hammer Property Investment @ Auctions!
Why invest at auction? £150,000+
Why invest at auction? http://www.eigroup.co.uk/
Costs CASE STUDY: Rupert and Charlotte W had tried to buy three properties at auction but had been outbid on each occasion. Despite being cash buyers they were finding it hard to buy a repossessed farmhouse near Gloucester which had a guide price of £500,000. On the morning of the sale their eye was caught by a fantastic manor house in Shropshire. It had been repossessed by the bank and was a late entry in the catalogue. It had a guide price of £200,000. This seemed incredible value for money. On the spur of the moment Rupert and Charlotte decided to bid for it. To their delight they bought it for £170,000. Their delight was turned to horror when they viewed the property with their surveyor. The property had been partially converted into a hotel and was inhabitable. The sheer scale of work was enormous. However, the real problem was that the building was listed and the former owners had been served with a repairs notice ordering them to restore the building. The cost of doing this would be astronomical. The cost of restoring a listed building of this size was beyond Rupert and Charlotte’s means and they were left with no alternative but to resell the property immediately. Local agents were unable to find a buyer and the property was eventually resold at auction six months later for just £120,000. Commenting on his experience, Rupert said, “I wish to God that we had never seen the place. All told, the cost of financing temporary repairs, legal costs, stamp duty, and the loss we made on the property have come to more than £100,000. We should never have bought a property at auction without doing the proper research.”
Renovation & Refurbishment CASE STUDY: Rakesh P bought a large two-bedroom top floor flat in Islington, North London in January 1997 for £150,000. The flat had originally been converted from a large Victorian house in the early 1970s. The conversion had been badly and cheaply done and was looking very tired. The kitchen was 1970s blue Formica. The bathroom was 1970s avocado. The heating system didn't work and the walls were decorated in heavy patterned flock wallpaper with carpets in chocolate brown. Rakesh spent twelve month completely refurbishing the place. he changed the kitchen and bathroom and managed to fit a second bathroom into the loft space. He added three skylight windows which made the living room, kitchen and main bedroom seem much bigger and brighter. He installed new central heating, modern lighting and redecorated and recarpeted throughout in neutral colours. Best of all Rakesh managed to get planning permission to create stunning south facing roof terrace with magnificent views across to the city of London. Rakesh's total refurbishment budget came to £26,000. Fourteen months after he bought it Rakesh sold his flat for £310,000 to a young professional couple who both worked long hours in the city. Commenting on his experience Rakesh said, “I was able to buy a very ordinary, rather tired flat and turn it into something special. The roof terrace was the most important improvement. It turned a nice flat into a unique flat and I am sure that I got the price that I did because of it. I've nearly doubled my money in a year. I am delighted.”
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