Low value property selling at property auctions
Many investors are looking for low value commercial properties that can be refurbished for rental, for resale or converted to residential use. Commercial mortgages are usually not available for low value properties, but bridging finance can be used to complete purchases. After the property has been refurbished it may be eligible for more long-term finance or resold and the bridging loan repaid.
Miskin Hall in Rhondda, Wales is being sold at auction by the local council with a guided price of £10,0000. The winning bidder will need to obtain planning permission for redevelopment to make their investment worthwhile.
Another Welsh property, Llandysul, is expected to sell for between £20,000 and £25,000. The reason for the low price is the mill and cottage on the land are derelict and the only access is by an overgrown private track.
In Newlyn Harbour in Cornwall, a public toilet closed by the local council is being auctioned with a guide price of £15,000. The building will need either extending or demolishing to realise its commercial or residential potential. The local residents were not pleased with losing their public convenience, but it is doubtful whether it is financially viable for the new owner to open the building as a toilet again.
Bridging loans are useful for financing property bought at auctions. Investors that purchase very low value buildings may need loans for both purchasing the property and refurbishment work. A bridging finance broker can find the best loan deals for the circumstance.