Derelict properties have gained renown and popularity in the United Kingdom because of one reason: their below market value price. Modernising abandoned houses and renovating rundown homes have become so much in vogue nowadays that many property investors are seeing a derelict property as a new source of substantial profits.
These derelict properties are sold at a bargain price for a host of reasons. Some of them have become eyesores to the community, others have been neglected by their former owners due to nasty legal battles and some have just been left in a state of disrepair. There are over a million derelict properties all across the UK, with many of them sold at prices way below their market value once the relevant works are complete. For the property investor on a budget or for the veteran investor, a rundown property is a cheap and reasonable way to convert to an investment property or to add to your portfolio.
Investing in a derelict property, however, is not for the faint of heart. As a property investor, you need to be hands-on and be able to do a lot of the work on your own. Renovation can be a challenge that can eat up your time, effort, patience and financial resources. Moreover, reviving a rundown property can be quite costly. Make sure that you have figured out the numbers accurately in a way that you can still price the property for a substantial profit after deducting the costs of renovation.
If you are convinced that investing in derelict properties is right for you, then the first challenge that you have to jump is finding the right property. Most of the time, derelict properties can be quite difficult to locate for the reason that they are often not advertised or included in property listings. Investors often hit the jackpot by spotting one while driving through an area. You then need to ask the local Land Registry for the identity of the owner to find out if he is willing to sell.
If you have no such luck in your neighbourhood, you may want to try going to local authorities for a list of empty properties in the area. Councils can be willing to hand out this information. However, do not assume that you can buy every derelict property you drive by. Some owners are reluctant to sell their properties, even though they have been left abandoned for many years.
The best place to buy a derelict property is through an auction. Auction houses usually have a portfolio of these rundown properties. Many previous owners of these dilapidated houses have been forced to sell, perhaps due to the demands of the local council. A sale at an auction is completed within a quick time frame, meaning that the property can be yours in as little as one month’s time.
You should expect not to pay market price for a derelict property. Chances are that the property will be priced at an average of 20 per cent below market value. This is indeed a fairly reasonable price for you since you can still resell this property for an enormous profit.
Parmdeep Vadesha is a property investment expert and founder of the largest community of property entrepreneurs on the web who buy below market value properties from distressed homeowners facing repossession, divorce and bankruptcy. He writes a monthly newsletter for over 70,000 property investors worldwide - www.Property-System.com
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