Many properties are sold at auction at below market prices and are popular with property investors, but There are several matters to consider before bidding, says a December 2016 article on PropertyInvestorToday.co.uk.

First of all, if  buying investment property, it may be difficult to get a commercial mortgage if the property has been owned by the vendor for less than six months.

Secondly, if the property has issues that make it uninhabitable, such as bathrooms or kitchens that need refurbishing, it could make it difficult to obtain a commercial mortgage. A bridging loan could be used to finance the renovations to make it more eligible for a mortgage.

Thirdly, if an investor purchases a house and intends to convert it for multiple occupancy, it has to be licenced by the local authority. Councils have varying conditions for granting multiple occupancy licences, so it’s advisable to check for their requirements before bidding.

Investors will be expected to pay a deposit of 10% of the winning bid amount to secure the sales and will have to complete the purchase within 28 days. This means that investors need to have access to both short-term and long-term finance. Investors should consult a broker who can advise on their eligibility for both bridging loans and commercial mortgages.

If the property is a buy-to-let investment, stamp duty at 3% of the value of the property will be charged,

After research and due diligence, property investors can buy modestly priced properties for later resale at a profit or to rent out.