Dec 11

The Benefits of Foreclosures as an Investment Option

According to the National Association of Realtors (NAR), the foreclosure inventory has reached the lowest levels since 2010. While this might be a good indicator in the overall real estate market, it also points to diminishing opportunities that lie within the foreclosure market for investors. If you are looking for a chance to get hold of good property and high return on investment, this should be the time to go out and grab the few existing foreclosed properties in order to help grow your investment portfolio. There are many reasons why these properties have been a hot cake in the market and understanding these will help you create a calculated strategy in investing.

Valued Property
There is no denying that foreclosures are painful and through the pictures and reports you might have seen in the media, it is obvious most owners had put a lot of money in their homes. As such, most of these properties are either prime or very high value homes which only the bad economic times have forced the owners to give them up. Investing in foreclosures in most cities is thus a profitable venture which will increase your cash flow in time especially as the economy starts picking up and more people return to the market for their homes.

Quick Transactions

In most cases, banks will give the seller an opportunity to sell and pay off what they can from the sale. This is called a pre-foreclosure and at this stage, you will find the seller is too eager to offload the property and downgrade to another home. As such, you will not be boggled down by unnecessary haggling which slows down most of the real estate market deals.

Value for Money

The best selling point of foreclosures is the affordable price. These properties present great bargains options whether it is pre-foreclosure or even REOs. In all cases, the homeowner wants to sell as fast as possible and if the property is already in foreclosure, banks also want to offload the property in order to concentrate on their core business. If you are suave at picking foreclosure deals, you will in no time have a very wonderful looking portfolio.

Other benefits especially for REOs include the fact that such properties have good titles. In addition, you have the opportunity to remodel the house especially if the price is very favorable and then resell the home at a higher profit margin that can be provided by any other investment in the market. Before jumping into the market, always do your research especially through online listings.

Evaluate the process too and inspect the property plus the neighborhood to ensure you get value for your money. The fact that most sellers are desperate to offload the property should also be used to your advantage and hence, try to negotiate as much as possible in order to bring the price down as far as possible. So, go out and enjoy seeing your portfolio grow gradually.

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