Dear Valued readers and visitors,
Lately, one of my siblings approached me to explore on property auction. He was attracted by the fact that a huge amount of money can be made speedily, but I am cautiously optimistic.
No doubt there are huge opportunities available at properties auction, however there are huge traps too. I guess the risks are proportionate with the opportunities. So, if you choose to play this game, you must first of all know what you are doing. Otherwise, you may lose it all and return with a much bigger headache.
Location, location and location is always the key issue as far as property is concerned. Not surprisingly that you can find some properties being auctioned at a very low price. But, low price does not mean it is cheap. This is because no one will buy from you later on when you want to dispose it. You need to have the mean to hold it. Guess you know what I mean now.
The second dangerous trap is if the property is occupied, then it is your responsibility to evict them from it because you are buying the auctioned property as it is. This may be very burdensome if they are not in most of the time. Even if they are, what can you do if they refuse to open the door. No doubt, you may obtain court order to evict them but it takes time. Time is the essence of any business. Worse still, at times they may refuse to budge even you have the court order! Therefore, it is advisable not to touch those properties that are tenanted and the people living there are not willing to move out – no matter how cheap the property is. Choosing another property seems to be a better choice.
The third trap is outstanding bills. These outstanding bills may be mountain high such as renovation costs, electric, water, maintenance, assessment taxes etc... Therefore, it is vitally important to ascertain with accuracy before you bid for the property. Otherwise, you could be buying a property with huge outstanding bills to be settled. This may make the property cost even more than its market value.
However, this does not mean that you should shy away from auction, but you must do your home work well and calculate all these costs and figure out whether it is worthwhile for you to bid for it. At the same time, you must also take into accounts, its repair costs. The repair cost will obviously vary much depending on the condition of the property.
These are the four main traps that await an unwary bidder at property auctions. As such, it is always wise to equip yourself with all the relevant and material knowledge with this subject before you deal with it.
Hope the above is of assistance to you.