Invest In Foreclosures To Increase Your Profits

Investing in rental property can be a stressful process, even for the most experienced investor. Finding the right property in the right location, with the right amenities to attract prospective tenants is difficult enough. Then there’s funding the down payment to worry about. The whole process can be time consuming and draining – both financially and mentally.

Despite the headaches, however, investing in real estate is still a great way to increase your income. Whether you want to enhance your lifestyle or save for retirement, real estate investment is the way to go.

Now, having said that, there is a way to reduce some of the stress and financial burden associated with real estate investing by opting to purchase foreclosed properties instead.

Why Foreclosed Properties?

The word “foreclosure” usually brings to mind negative feelings, especially for anyone looking to invest in this type of real estate. The reality is, however, foreclosed properties offer investors a unique and wonderful buying opportunity. If you’re thinking about investing in foreclosed real estate, taking the right precautions enables you to grab a honey of a deal that can put you in a positive cash flow quickly.

So, just what are some of the advantages of investing in foreclosure properties?

Discounted prices

Foreclosed properties usually come with drastically reduced price tags, especially when compared with other properties in the neighborhood. What this means for buyers looking to invest is an opportunity to snap up a great piece of property for less.

Many people think foreclosed properties only exist in poor neighborhoods, but this is false. If you take the time to do a little research, you’ll find many great properties close to popular amenities that attract renters easily.

Better bargaining leverage

Sometimes foreclosed properties end up staying on the market for a long time. This means the lender who holds the mortgage for the property isn’t getting any money in return for the property. This gives investors an opportunity to get a great deal if the lender just wants to get rid of the property and recoup some of their money. They might be willing to let it go at a rock-bottom price.

Fast buying process

Lenders hope to sell foreclosed homes quickly. The faster they sell them, the less loss they suffer. This is a bonus for anyone looking to buy a foreclosed property because, acting as the seller, the lender won’t back out at the last minute. As soon as all the paperwork is signed, you own the property. You can begin looking for a tenant and collecting rent much faster!

Lower down payments

In most cases, lenders are willing to accept lower down payments for foreclosed properties. From an investment standpoint, this makes it much easier for beginning investors to acquire their first rental property, and foreclosures usually have lower interest rates, this means savings all the way around.

Better value in the long run

When you purchase a property for cheap, and the other similar properties in the neighborhood are valued at much higher, your buyer’s percentage increase is likely to be higher than your neighbors’.

Furthermore, buying cheap allows you to make upgrades and renovations that increase your home’s value dramatically, thus allowing you to charge higher rent. Should you decide to sell sometime in the future, your profit from the sale is likely to be much higher than the original price you paid for the property.