Buying Investment Property at Auction As long as you've got the cash and the right know-how, this is the best and cheapest way to buy investment property.

Why buy at auction?

Best practice when buying at auction

Most property auctions take place in hotels. I would always recommend that if you have never bought at a property auction before that you do 'a dry run'. Apply for the auctioneer's catalogue and go along to get the feel of the auction process, making a note of by how much actual selling prices exceed guide prices.

After this, once you have identified a property on which you intend to bid, ensure you have the funds in place, get a survey done and request the Legal Pack from the auctioneers. If everything looks goods then set yourself a maximum bidding price and attend the auction. It's best not to sit right at the front as you cannot easily see who you are bidding against, Although it's totally wrong, auctioneers have been known to employ the very dodgy practice of 'taking bids off the wall' – inventing bids, so that you end up bidding against yourself!

Points to bear in mind

Once upon a time, before property prices began their meteoric rise, it was quite easy for a non-builder or non professional developer to bag a bargain at auction. In recent times however the increased competition has made it much more difficult. But of course, with the current falling property market, those opportunities may return.

Most auction properties tend to need a lot of refurbishment or they may simply be a bit quirky and hard for estate agents to value. More and more repossession bargains are appearing in auction rooms these days and this is where the non-builder can really get a bargain.

When you view a dilapidated property on which you want to bid it's important to get a good idea of the amount you will need to spend refurbishing the property.