Many investors buy orthodox buildings, often at low prices, which they redevelop in order to make a profit.
In June 2016, the Evening Chronicle reported that a ladies’ public toilet in Newcastle-upon-Tyne was being sold at auction with a guide price of £25,000. At 160 square feet, it may have been on the small side, but it came with running water and a drain and was advertised as suitable for a micro business.
Many houses are sold at auctions for less than £15,000. These are described as ‘derelict’, so will need a lot of money spending on them to become habitable.
A recent bargain was the sale of a terrace houses in Liverpool, which The Daily Mirror reported on in March 2016. Despite the fact that Beatle Ringo Starr once lived there, it sold at auction for only £70,000. Potential buyers were denied the chance to cash in on the Beatles association as a condition of sales was that it could not become a tourist attraction or a Ringo Starr museum. The auction for the house was held at the Cavern Club, where the Beatles regularly performed.
At the other end of the market, a July 2016 Daily Express article covered a property investor who bought a small garage in Chelsea at auction for £670,000, which is more than most houses in the rest of the UK cost. The garage came with planning permission for it to be converted into a small one-bedroom house.
Commercial mortgages are available for most properties bought at auction. Specialist lenders can provide bridging loans to finance the purchase and renovation of derelict property. An insurance broker will arrange the best deal.