Photos of an auctioneer's hammer, auctioneer and property

Learn how YOU can find property at up to 40% below market value

Buying A Property At Auction To Fix Up And Sell

Buying a property at auction with the intent to resell it at a profit is as much a business as other money-earning careers. You’ll need to run every aspect of your business in an efficient way. Always remember that the properties that you purchase at less than market price are not homes that you would buy for yourself, they are merely your stock in trade. This is a business proposition. You must make sure you’re fully educated about all the costs involved.

Use our FREE! and easy to use Property Auction Calculator to find out whether the property you’re interested in can make you money.

Our free calculator will tell you if there’s a profit, and how much, by calculating all the different costs involved, many of which you may not have thought of. There’s no need to second-guess the costs. Just enter the figures for each category and our free calculator computes all the figures you need.

Purchasing a resale property below market price at auction can pay off handsomely and provide high capital gain. The key is to budget for all of the appropriate costs in order to determine your profit potential.

What are the key costs you need to consider?

Financing costs
Auctioneers fees
Renovation and refurbishment costs
Buying costs (Solicitors)
Selling costs (Solicitors)
Running costs
Insurance costs
Up front costs
Contingency fund
Initial Costs
Services

Keep reading to find the answers to these and other important questions.

Financing costs (Bridging Finance, Business Loans and Mortgages)

Spending a little time planning can save you thousands of pounds, because you’ll know all the costs financing companies can charge. You’ll then have complete control over your financing arrangements and be able to get the best deal. See our Property Auction Financing Tips section for the best financing products available for buying investment property at auction.

Considering a bridging or business loan, or a conventional mortgage? Our FREE! and easy to use Property Auction Calculator can compare companies and save you thousands in interest and charges as you decide which lender is best for you.

There’s no need to put your investment at risk by second-guessing any of these costs. When you know all the different costs that lenders charge in the form of exit fees and completion fees, you’ll know exactly how much to bid at auction.

Our free and easy to use calculator includes all costs and calculations for both bridging finance and business loans OR using mortgages to finance your property auction purchase. (You can also use the calculator for a combination of the two i.e. using bridging finance initially then using a mortgage.)

Examples of the finance costs and calculations included in the free calculator

Broker Fees
Mortgage interest rates
Length of financing
Financing cost per month
Total amount of capital required
Mortgage payment per month
Repayment Mortgage Calculation (Daily and Yearly Interest)
Interest only mortgages
Total Finance cost for the Year
Exit Fees

Our easy to use FREE! Property Auction Calculator can keep financing surprises like arrangement fees and exit fees from harming the return on your investment property.

Property Auction Bridging Loans and Mortgages

Are you looking for short term finance to secure an auction property? We offer Bridging Loans that will enable you to secure the deal....FAST! We can also find you FEE FREE Buy to Let Mortgages to suit your needs! We can help you with Fee Free Property Auction Bridging Loans and Mortgages

Auctioneers fees

Did you know that when the hammer falls on your successful bid, you’re liable for immediate payment of a buying fee that can range from £150 to £300?

Our free calculator keeps you aware of all auctioneer’s fees, including buyer’s fees.

Renovation and refurbishment costs

Properties that need renovation or refurbishment can frequently be purchased at auction well below the prices of neighbouring properties. The key to the maximum profit from renovation or refurbishment is to find such a property that has a potential selling price in excess of all costs.

Build a clear picture of the types of property in demand. Then build a profile of the requirements that people who want these properties will require. For instance a young couple working in the city will consider good transport links, power shower, a good kitchen, and a neutral colour scheme. Maybe your property could suit a couple of different types of buyers. Try to anticipate what they’ll be looking for and budget all of those costs.

Remember, it’s not just about location, it’s offering the right property in the right location at the right price.

And, too, you must consider the overall balance of your renovation costs. It wouldn’t do to refurbish just one room, or to fix up the bathroom and leave the kitchen.

Some ways you can add value to any property include:

Make the property clean looking, crisp, fresh, and warm. Paint in a neutral colour scheme. Add or replace carpets. Consider remodelling the kitchen and bathroom.
Add functionality with an extra bedroom or extension.
Repair any obvious problems such as a leaky roof or flaky plaster.
Make it a home with eating and relaxing areas, and places that provide privacy.

Our FREE! and easy to use Property Auction Calculator helps you to decide on all the different renovation and refurbishment costs, including building and decorating costs.

Buying costs (Solicitors)

When you buy property at auction you’ll be required to pay solicitors (legal) fees, stamp duty and land registry searches.

There are also a number of other possible costs that you could incur; such as having to pay money owed to the local authority or possibly having to pay the sellers legal fees.

If you buy a Leasehold property there are also other possible costs that you could incur; such as Transfer of Notice.

Certain auctioneers and vendors additional costs have begun to become more common. Many auction houses have not only passed these costs on to the purchaser, but have made them payable when contracts are exchanged at the fall of the hammer.

All of these possibilities are included in our calculator so that you’ll be made aware of these amounts that the purchaser is expected to pay.

Our free calculator includes all the buying (Solicitors) costs to consider when budgeting for buying at auction. It also includes costs such as Stamp Duty and Land Registry for you.

Selling costs (Solicitors)

There are a number of solicitors (legal) costs you’ll have to pay when you sell your property after any work has been completed.

You have to pay solicitors (legal) costs when you sell your property after any work has been completed. All of these costs are in our free spreadsheet such as bank charges and estate agency fees.

Our free calculator includes all the costs to include when budgeting for selling costs.

Top-level calculations

There are seven top-level calculations that you must consider when you decide if the investment is for you. Our calculator automatically determines all seven. They are:

Your bid price limit, which is the maximum price you will bid up to. Our calculator allows you to adjust your limit to see how your potential profit margins and yields are affected.
The achievable sale price you expect to achieve on this property.
The total costs with and without a contingency, other than the purchase price of the property.
The contingency amount.
The total cost of the project, including the purchase price of the property at auction and all possible costs.
Through a Limited Company structure.
a. Corporation Tax Rate
b. Net profit before tax.
c. Corporation tax.
d. Profit after tax.
e. Dividend.
f. Retained profit.
Through an Individual structure.
a. Income Tax Rate
b. National Insurance Rate
c. Profit Before Tax
d. Income Tax Payable
e. National Insurance Payable
f. Profit After Tax

Our FREE! and easy to use Property Auction Calculator includes all seven of the top-level calculations investors need to know.

Running costs

There are a number of possible running costs that a prudent investor will include in the calculations. The Heating Bills due if it takes, for instance, five months to turn the project around or the Ground Rent are two examples.

Our free calculator includes all possible running costs.

Insurance costs

At the exchange of contracts (when the hammer falls) you’re immediately responsible for buildings insurance to cover any loss or damage to the structure and fittings of the property.

Our free calculator includes all the insurance costs you have to consider.

Upfront costs

It’s very useful to know what costs you have to pay upfront and how much they are. This is especially true when you have to pay regardless of whether you are the successful bidder at the actual auction.

Our free calculator has all the different upfront costs such as property survey costs and calculates their total so you’ll know how much to budget.

Contingency Fund

Wise investors allow for a contingency fund as a safety net to guard against anything costing more than they’ve budgeted.

Ten percent is a common and prudent amount.

Our FREE! and easy to use Property Auction Calculator allows you to enter a contingency percentage which is calculated against all costs.

Other costs

There are a number of costs such as Accountant costs that don’t fall into neat categories.
Our free calculator anticipates these costs as well.

Services

There are also other costs such as Gas Cover and Electric Tests that can be overlooked.
Our free calculator anticipates these costs as well.

Initial costs

There are also some possible initial costs that a prudent investor will include in the calculations. Making the property secure is an example.

Our free calculator includes all the possible initial costs.

Have more questions about property auctions? Find answers now:

Don't pay too much for a piece of property at auction. Get a complete checklist of all the costs involved and how to calculate them with our FREE and easy to use Property Auction Calculator. We've done all the work for you. You'll know exactly what price you can bid up to at the property auction.