Property Repossessions - Now is the Time for You to Go Bargain-Hunting

As the market stabilization continues, property investors on the lookout for great bargains are finding they have a lot to choose from. With the number of property repossessions expected to soar even higher, more affordable properties have become available to property professionals who are looking to add to their portfolios. According to the EIGroup, the average price had significantly declined to £118,478 - a drop of more than 30%. For sophisticated property investors, now is indeed the time to go scouting for bargain properties.

While repossessions are unfortunate in one aspect, they pose certain benefits for those in the property investment arena. If you’re a property investor, your main objective is to purchase a repossessed property and resell it for a higher price or rent the property with a long term perspective. Why repossessed properties? Because these often sell for dramatically lower prices than their market worth. As a rule of thumb, you should be able to obtain a repossessed property at 15% to 18% below its market valuation without much effort or skill.

Where to find repossessed properties?

Property repossession figures are climbing and many properties are being turned over by lenders to property auctions. In theory, banks, surveyors and estate agents are bound by the law to sell a repossessed property at the best possible price. While the lender is under obligation to sell it at the best price, the speed of sale is likewise crucial since most of these lenders aim to sell repossessed properties within three months. When these properties go to auction, their prices drop further - between 6 and 10%. Many repossessed properties at auctions have established the guide at 20% below market value.

Since numbers for repossessed properties going under the hammer are expected to rise to even higher levels due to defaulting borrowers and quick sale schemes, auctions are selling more houses now than in previous years – and at even lower prices. According to This Is Money, homes purchased three years ago for £500,000 are going under the hammer for little more than £250,000. As the economy continues its downhill course, property repossessions going to auctions will continue to escalate.

Buy below market value

Smart property investing demands that you pick up a property below its market value - the key to obtaining good investments and significant profits. So what do you do to acquire a BMV property at a discount? Simple. Buy the property before it gets repossessed by the lender. Many investors are in the business of helping homeowners on the verge of repossession of their properties. These property investors buy the property from homeowners and rent it back to them. Most often these investors are able to acquire properties at prices between 70% and 80% of its open market valuation.

With the credit crunch comes the opportunity to seize real bargain properties, convert them to income-generators and earn considerable returns. And with experts anticipating property repossessions to maintain its uphill climb, there has never been a better time to start your bargain property hunting than now.