Buying Investment Properties for Extra Income
Investing in property became quite popular in recent years due to the housing boom, but the inevitable bursting of the real-estate bubble resulted in many financial tragedies for lots of investors and families, most of whom didn’t know much about property investment and were simply following investing tips from friends.
But as they say in investment circles, last year’s gold is this year’s garbage–and vice versa. The precipitous fall in housing prices has created an abundance of opportunities for those interested in beefing up their current income or completely replacing it. Many suitable investment properties are currently on the market at highly attractive prices, and there are deals aplenty to be had for those who dare to enter the market. And you should dare to, as long as you’re willing to apply some elbow grease and good honest work to do it right.
Foreclosed homes under bank ownership offer some of the best values for the price, and banks will often offer these properties for purchase at under the fair market price. Though they’ll sometimes utilize real-estate agents to sell their newly acquired houses back to the public, prospective buyers can usually get past these middlemen if they are persistent enough. So be a squeaky wheel if you find a piece of property you’d like to invest in. Call the bank repeatedly and get hold of a representative in charge of foreclosed housing. Don’t be rude, but be persistent so they know who to talk to if that property doesn’t sell right away through their real-estate agent.
But when you do consider investing in foreclosed properties, make sure you evaluate it very carefully. Because the foreclosure process can take up to a year from the time the previous owners stopped paying their mortgage, these properties are often in a state of disrepair–aesthetically and structurally. Take the time to get a proper appraisal and, if possible, have a handy friend take a look at your prospective investment property and give you an estimate of what improvements and maintenance would cost to get it to a marketable state. Whether you intend to rent out your new property investment or simply sell it as quickly as possible, some improvements will be needed. Be prepared with an idea of what the costs will be before you make your purchase!
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