If you’re looking to buy your first investment property, you need to know where to find it. You can search for ‘for sale’ signs, the newspapers, or head on over to an auction.
There are great opportunities at property auctions but what most assume is that you’ll be getting a property that is ‘dirt cheap’. This is not always the case. What you need to understand is why people put their homes up for auction.
People usually put their homes up for auction because they’re going through a divorce and the settlement needs to handled quickly, or the bank has repossessed the property. These houses could be in perfect condition.
What to do before the auction
Needless to say, you might still find property below its value, but this depends on the auctioneers or the seller.
If you’re interested in the auction market, there are a few things that you need to take care of beforehand:
- Most investors research the property that is up for auction to ‘get a feel’ for what they’re bidding on.
- Register and pay a deposit for the auction you’re attending. Remember to bring along your ID and proof of address.
- Most properties will have a Conditions of Sale agreement. Read through this.
- Make sure you have the finances to secure this bid. Most auction properties need to be paid with 14 to 30 days.
Why buying an auction property can help you with your portfolio
It may seem overwhelming buying property this way, but buying at an auction has many advantages:
- You avoid the negotiation periods that usually come with buying property the normal way.
- As a buyer, you’re guaranteed that the seller is certain that they’re willing to sell the house.
- You might get the property below its value because the seller is willing to sell it fast.
If it’s your first time buying a property at auction, view a few auctions to see how the process works. Once you’re comfortable, you can start bidding for your first property!
To find out more about property auctions and where to find the best property deals in South Africa, book your seat at our FREE property investment seminars.