Since the mortgage crisis of 2008, investing in foreclosure properties is more common than ever before. Buying a foreclosed home as an investment property may be faster and easier than a traditional investment property purchase.
A property may be foreclosed upon when the mortgage holder misses repeated mortgage payments on the property. If they so choose, the lender may repossess the property and sell it at a discounted price to recoup the amount owed.
Why You Should Buy a Foreclosed Property
There are several benefits to investing in a foreclosed property:
Discounted price. A bank has no interest in owning a property and simply wants to salvage the amount owed on the property.
With the increased number of foreclosed properties, they have never been easier to find.
Government-sanctioned financing options, like FHA or USDA loans.
Fewer title concerns. Mortgage lenders tend to solve all previous liens on bank-owned properties prior to putting the property up for sale.
Faster buying process. Lenders are eager to recoup their profits, which means you can close on the house faster and start reaping the benefits.
Where to Find a Foreclosed Property
Finding a foreclosed home, or a home in pre-foreclosure, has never been easier. There are countless websites that list homes in various degrees of foreclosure, such as Foreclosure, RealtyBid, or Auction. Even some government agencies provide online foreclosure auctions, such as the U.S. Department of Treasury and the Federal National Mortgage Association. Online auctions may require you to provide proof of cash or ability to pay for your bid, but can result in a diamond in the rough find at a much lower price than you expected.
Your neighborhood realtor may be a surprising way to find a foreclosed property. As experts of their areas, realtors may be aware of properties headed for foreclosure. Realtors also have access to the multiple listing services (MLS) database, which lists foreclosed homes.
The key to getting a great deal on a foreclosed home is to beat out any competition, so doing the footwork yourself may pay off dividends. Watch for homes in your area that state they are bank-owned and may not be listed online. Other less-literal signs to look for include unkempt lawns, unmaintained exterior or unchecked mail or newspapers.
What to Do After You Purchase a Foreclosed Property
An investment property can be a hands-off way of prompting monthly income, especially with the help of a property management company. When you’re ready to turn your property into a steady stream of additional income, let Rooftop Real Estate Management take on the traditional responsibilities of operating in the rental market. Rooftop Real Estate Management can provide you with the peace of mind to care for your investment property and alleviate the potential headaches that come with being a landlord.
An investment property is a great way to build your personal wealth, but a foreclosed property may be a simpler and less expensive way to start. The first step is investing in your future, Rooftop Real Estate Management is here to handle the rest.