Plummeting markets and foreclosed real estate have made some neighborhoods look like ghost towns, but if you are a savvy investor, you can use this market to start a real estate portfolio.
Plummeting markets and foreclosed real estate have made some neighborhoods look like ghost towns, but if you are a savvy investor, you can use this market to start a real estate portfolio. If you want to be a landlord or a property flipper, foreclosed homes may offer you a chance at future profit.
If you are interested in flipping foreclosed real estate, you are in the first set of buyers. Flipping means you purchase a low-cost property that's often rundown and invest time and resources into fixing up the home and yard. Your goal is to increase the value of the property above the total paid to purchase and renovate it.
The popularity of house flipping grew rapidly after the debut of numerous television shows about the industry. During the housing crisis, flipping became less profitable. Because foreclosures sometimes offer great deals on purchase prices and the housing market is starting to bounce back, you may make money flipping houses. In fact, realtors in Chicago are packing buses with interested buyers for tours of foreclosed properties.
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If you are buying foreclosed real estate as an investment strategy, you are in the other group. Buying houses at a low prices and making only necessary repairs leaves plenty of profit in a structure, especially if the goal is to rent it. Since so many individuals lost their homes or experienced credit issues in the past few years, rental properties are in high demand. In some cases, you can rent properties for more than the monthly mortgage payment, making the strategy an immediate win.
If you are investing in foreclosed houses, you might rent the properties short term just to cover costs. Eventually, you can sell the homes for a large profit as the market improves. Ultimately, you are looking at real estate foreclosures in the same way you might view the stock market: with intent to buy low and sell high.
If you want to find out more about purchasing real estate, you can start by checking out the local foreclosed real estate listings. Use the foreclosed property search function at Reply! to find homes in your area.