What to Consider When Buying a Former Buy-to-Let at Auction

As there’s been a rise in the number of property investors selling their buy-to-lets at auction, it’s important to consider a few things if you end up being interested in purchasing one of these kinds of property.

Check if the property is vacant or has tenants in situ

For starters, you need to find out if the property is being sold vacant or with tenants in situ. These naturally have different implications for buyers.

If you’re interested in buying a property with tenants in situ, you could benefit from earning rental income from day one. But you’ll want to see a copy of the tenancy agreement, rent schedules, payment history and compliance with relevant legislation. This is really where you need to do your due diligence.

If you’re looking to buy a vacant property, you won’t have to worry about these areas, but there are still things to consider, such as how well it seems the property has been maintained.

Understand why the landlord might be selling

Currently, there are a number of reasons landlords are choosing to sell their buy-to-lets, including increasing regulation and tax burdens, and some are even looking for a relatively fast disposal.

There are government proposals set to increase the minimum energy efficiency standards to the EPC rating of C for all rental properties. This hasn’t been written into law yet but has been talked about for some time.

The cost of energy efficient improvements can be steep for some properties. And whether you plan to rent the property out or live in it, it’s helpful to understand what the EPC rating of the property is and estimated costs for certain improvements, particularly with the current high energy prices.

And if you do want to rent the property out, make sure you’re aware of any upcoming or potential changes to legislation. This can help you figure out and understand all of your legal implications as a landlord, and this information may need to impact what you end up deciding to bid on the property!

Thoroughly assess the condition of the property

It’s also helpful to check the condition of the property in detail and assess whether it’s been properly maintained by the landlord and handled with care by the tenants. And also do your best to uncover any major issues that have been left to fester.

Getting a survey undertaken can help you better understand the current state of the property. If there are things that come up, it can be helpful to take a builder to the property to help provide advice or estimations on any work that would need to be done, so you can factor in these costs as well.

What to Consider When Buying a Former Buy-to-Let at Auction

Buying at auction

Buying property at auction comes with a number of benefits. And with an increasing number of former buy-to-lets being sold at auction, it’s important to consider these things and make decisions accordingly.

If you decide you want to put a bid in on a property, take some time figuring out your bidding plan and what your strategy will be. And as always, take time doing your due diligence.

It can be helpful to work with expert professionals, such as solicitors, builders and surveyors, to allow you to make the most informed decisions possible and minimise buyer risks.