One of the most reliable ways of achieving a state of wealth is through acquiring property through auction houses.
Property is an asset that rarely loses its value providing it is acquired at the right time and for the right price. At times of economic distress, such as has been seen the world over in recent months, property can be purchased at extremely favorable prices, often well below its real market value, providing it is acquired with some intelligence. Acquiring property through auction houses is an option that is becoming more and more popular, and can be an excellent way of setting yourself on the road to financial freedom.
It is currently a buyers’ market in South Africa, and interest rates have never been lower, so, in short, this is an excellent time to get into the property market.
Before committing yourself to bidding for a specific property through an auction house, you’ll need to carry out some detective work – after all only a fool buys a piece of property unseen. You will obviously have to inspect the property itself, to judge its state of repair and whether money will have to be spent on renovating it, and if so, of course, how much money needs to be spent.
Find out as much as you can about the area the property is located in. Is it a run down area or is it one that is developing. If it is the latter, so much the better. Assuming that you have no intention of living in the property yourself, you will probably let it out to tenants.
Do some local research to try to establish what class of tenant you can expect in this area.
Approach local estate agents and establish how much you will need to budget for local rates, taxes, levies and for maintenance. These are all aspects of property purchase that have to be considered beforehand when purchasing from auction houses.
When looking for a property in which to invest, bear in mind that not all property comes onto the market when its present owner is relocating. There is plenty of property that has come onto the market by other means, such as following death or a divorce, after repossession by the banks, even before repossession by the banks, since owners who are experiencing financial problems often sell at a reduced price in order to avoid foreclosure.
Identifying the property investment you are going to bid for takes times and effort, but is a field in which Work Your Wealth can point you in the right direction about. In addition we publish regular articles in our Free newsletter. You can sign up for this on this page. Owning a second property is an excellent way of reaching a state of financial freedom, and is a subject that we cover in detail in some of our specialized property workshops.