Investors purchase at auction for one of two main reasons.
1. Short-term investment. There is always a huge potential to add value to a property or land which has been purchased through an auction.
2. Long-term investment. The auction opportunity offers income from day one. Whether a residential or commercial property, the tenanted property offers income from the day of ownership.
When looking for tenanted property investors will seek the yield the lot will provide them. The rental yield is the annual rental income expressed as a percentage of the total property value. As a rule of thumb, between 6% and 8% is considered to be a reasonable level of rental yield, but different parts of the country can deliver significantly higher or lower returns.
So, a property with a yield of 16.7% would be deemed extremely attractive. 3 Boston Road, Holbeach, Spalding, Lincolnshire, PE12 7LR offers just this. A substantial, freehold, mixed-use premises. Fully Renovated. Ten-bedroom HMO, two commercial units, self-contained flat. Producing £66,116 rental income, combined, per annum. Gross yield, circa 17%.
That’s not all the property has to offer though, Currently, 3 HMO rooms, are vacant. Fully let, a further potential income of £18,000 per year is available bringing the yield to an eye-opening 21%!
Buying at auction is one of the fastest and most secure ways of purchasing property or land. When the gavel falls, contracts are exchanged immediately with completion set at a predetermined date, generally 28 days later. From this point on, the sale is legally binding and there is no fear of fall throughs or gazumping.
