Landlord vultures circle as more and more property owners are forced into distressed sales.
Should landlords ever draw a line when it comes to taking advantage of a distressed seller?
Buying a property at auction means that there is a good chance that the property has come through unfortunate circumstances. Auction property often appears from a bank repossession, a need for a quick sale or as the result of the death of an individual.
Not nice, when you think about it.
But, in the same way that the majority of the population is happy to buy a garment from a cheap clothes retailer ( and not dwell on the image of the eight year old child out in the far east working 12 hour days for pennies) . We don't think about where it has come from.
This human characteristic stops us feeling to much guilt and angst that might get in the way of us 'bagging a bargain'.
The same process comes into play when buying a property at auction - it's best not thinking too long and hard about the property's background story.
The current downward cycle in the economy as we all have heard by now, is bringing unemployment, difficult lending conditions and higher levels of property repossessions. This brings the temptation of cut price property from distressed sellers.
There is a whole market of ambulance chasing property investors ( property vultures ) and property agents trying to locate the most desperate property owners and persuade them into selling for the ( holy grail ) Below Market Value (BMV).
This involves placing adverts in papers, asking around estate agents for desperate sellers, rubbing hands together when they hear of sellers unfortunate unemployment and yes, chasing ambulances.
I must be honest, I personally do find this 'landlord vulture' element rather vulgar and distasteful.
However, I have bought at auction without asking questions, so what is the difference between that and searching out distressed sellers?
Back to the analogy about the discount clothes chains, we all know that the clothes are made through others misfortune, but we still buy them because they are cheap.
At least the 'landlord vultures' are happy to face up to their victims and not hide away at the back of the property auction room.
Purchasing property from desperate sellers is always going to happen and I don't disagree with it, I do however, have a slightly less regard for buy and rent back schemes where landlords will willingly relieve a homeowner from their property burden for up to 30% off the market value and then rent it back. Surely the home owner has other options before choosing to go down this route - DONT DO IT!
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