As you probably know by now – if you’re one of my regular readers – property investment is one of my many passions. I try to keep myself up-to-date with happenings in the property market in the UK especially. One story caught my eye today while watching Homes Under the Hammer on BBC One; it was the story of three sisters – Emily, Katie and Ellie – who bought a 3 bedroom, 2nd-floor London flat for 199,000 in September 2014. The auction guide price was £170,000.
So how did they make £12,800 every week for 10 weeks? First of all, I must mention that this is a leasehold flat which can be extended, for between £5,000 and £100,000 with the freeholder who they were already negotiating with.
The plan was to renovate the property for £15,000 in 8 weeks and spend about £25,000 to extend the lease with the freeholder.
It was only their second property purchase so they were not exactly veterans in the property game, so this is something you can do too with a little bit of research.
Their spend turned out to be just £13,000 with a time-frame of 10 weeks – 2 weeks later than planned, which is not unusual; this brought their total spend – excluding the leasehold costs – to £212,000.
One of the estate agents valued the refurbished property at between £300,000 and £310,000 and the other thought it would go for as much as £350,000! Katie – the most experienced sister – thought they’d be able to sell for between £335,000 and £340,000 which would net them at least £128,000 if they sold for £340,000.
So where do you come in? One of the things I’d suggest you do before buying at auction would be to research property prices in the area that you intend to buy from. A rule of thumb is to purchase the worst property in the best area as cheaply as possible from property auctioneers; there are hundreds scattered around the UK.
Of course, befriend reliable builders and make sure you have your finances in place before bidding.
If these 3 sisters can do it, so can you. Yes you can 🙂
Way to go Ellie, Katie and Emily if you’re reading this; and good luck in establishing your property empire.