Editor’s note: Yesterday, I shared a strategy from international real estate expert Ronan McMahon on how to turn US$100,000 into US$628,620. Today, Ronan shares another way to profit in real estate…
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There’s a buzz in the room. Someone raises his hand, and the auctioneer repeats his bid. Another prospective buyer puts her hand up. Everyone in this room wants to take the lot. But only one will get it.
That’s the picture a lot of people have when you talk about buying real estate at auction. And those kinds of auctions can be exciting to watch. But if you want to get the best value, that’s not the kind of auction you want to buy at.
You need to find the auctions where no one else is bidding… and where real estate is up for grabs that will rise in value. That’s something I know how to do.
(I explain all about auctions in my book, Ronan McMahon’s Profit Principle: An Insider’s Guide to Doubling Your Money in Real Estate Overseas.)
But to give you an insight into one place where you can use auctions to profit, let me tell you about Ireland.
The country is on a tear after a period of economic recession that caused property values to plummet. In Ireland right now, prices on prime real estate are climbing, especially in prime parts of the capital, Dublin, and buyers and renters are clamoring to get in. It’s as if the recession never happened.
But in 2011, it was a different story. Back then, if you’d been following my recommendations, you could have locked down a prime piece of real estate at auction that would have more than doubled in value in the following five years.
One lot that came up at one of Ireland’s fire-sale auctions was a little block of eight apartments and duplexes in the city of Limerick, in the country’s mid-west. The entire block was listed with a reserve price of €380,000, way below true value. It went for more than the reserve – for €475,000. That was still less than half the replacement cost (what it would cost you to construct the same building).
The fact that it sold above reserve wasn’t expected. At many auctions in Ireland between 2011 and 2013, I saw some great real estate that didn’t get a single bid. People were afraid to buy – so the competition in the room was slim to none even for real estate with big potential.
The buyer of those Limerick apartments and duplexes got a stellar deal. He likely recognised what I did – that recovery was coming for Ireland’s real estate market… and that rental properties would be in demand again.
That auction was four years ago. The buyer is well on his way to doubling his money in capital appreciation. And, he’s likely making a killing on rental income. At a minimum, he could have rented them out for €62,000 a year combined. That’s a potential gross of €248,000 over four years… with more to come.
Those kinds of deals are fewer and harder to find
But… they’re still out there, if you know where to look. I recently told members of my Real Estate Trend Alert group about another rare opportunity to profit at auction – by buying a piece of real estate that has little competition.
The buy is a little vacation home in the south of Ireland, close to beaches and a thriving city. And, it comes with a potentially low price point. Its reserve is €45,000 (around US$55,700 with current exchange rates). A buyer who got it at that price could do well.
I think the home would need another €10,000 (US$12,500) to freshen up the interior and exterior. But, once you had done that, you could rent it out. It’s classified as a vacation home, so you’d need to check if permitting allows long-term rental. If you can, you could get €750 (US$930) per month. That’s a 16 percent yield.
If you went short term you could get €1,200 (US$1,490) per month for a let of two to three months. Rent for a total of six months a year and you’re looking at a 13 percent yield.
All from an investment of as little as €55,000 (US$68,000).
In short, you don’t have to be a millionaire to make profits in overseas real estate… you just need to know what you’re doing.
That’s why I wrote my book, Ronan McMahon’s Profit Principle: An Insider’s Guide to Doubling Your Money in Real Estate Overseas, so that regular people can learn how to apply my battle-tested formula for success to make real profits. And right now, you can request a complimentary copy of my book. Get all the details right here.