Buying homes as investment has become even popular during a time in which home prices are at an all-time low. Real Estate income is a great way to not only increase your investment portfolio, but your daily income as well. When it comes to buying homes, foreclosures have become a favorite as they can be purchased at significantly discounted prices and sold for even more later on down the road.
Factors to Consider before Investing in Foreclosure Properties
The following one of the most important factors to consider before you begin investing in pre-foreclosure properties:
#1: Choose Your Location Wisely!
You’ve probably heard it said more times than none: “Location, location, location!”
Without a doubt, one of the most critical factors when it comes to researching foreclosure properties is to begin researching the area/location in which you plan to buy a home. Factors such as the city and surrounding neighborhoods are all important factors that must not be overlooked.
The location of your foreclosed home is important to keep in mind because as an investor, at some point, you will want to sell the home. Additionally, any home that you purchase, without a doubt, you want its value to appreciate. However, this cannot happen if the location in which your home resides is not desirable for future buyers.
Unfortunately, no matter how much work you’ve put into renovating your home, you will have a hard time selling your property if it is located in what is deemed as a “bad neighborhood.” Instead of a quick sale, you’ll often be faced with a longer selling time and far less offers on your home.
To prevent this from happening, consider performing a “neighborhood litmus test” before you go about purchasing a foreclosed home. This “neighborhood litmus test” should focus on factors such as nearby neighborhood growth, local school, and convenience. This information, such as a school district’s rankings or up-and-coming development can often be found online. In cases where you cannot locate this information, contacting local real estate agents may also help you get a better look at what you may be getting yourself into.
It is important to note that these key pieces of information are great “perks” to make note of when listing the home for sale. Additionally, the value of your home will most certainly appreciate overtime if it is located in a great neighborhood with good schools and plenty of amenities.