Tuesday, March 18, 2014

Buying foreclosed property? Read this

Because foreclosed property sells for less than market value, it may be a worthwhile investment. However, as a real estate investor, you should know exactly what you're getting yourself into. Buying a foreclosed home entails a lot of work and repairs. Read on...

Expect a foreclosed property to be in bad condition. With the previous owners leaving the property behind because of compromised finances, chances are the house is also poorly maintained.

Water and electricity

Most foreclosed homes have been abandoned for a while, and the water and electricity has been cut off. Additionally, abandoned homes may have severe water damages. Leaks are often difficult to spot therefore the property could have interior structural damage you do not know about. These are things you need to check and consider when buying a foreclosed property. 

Maintenance

Expect a foreclosed property to be in bad condition. With the previous owners leaving the property behind because of compromised finances, chances are the house is also poorly maintained. Lack of maintenance may lead to dead gardens, termite damage and bad leaks. 

Vandalism

Months of property abandonment will also make the property susceptible to vandalism and looting, particularly if the property is located in a high-crime area. Aside from random vandalism by outsiders, the previous owners themselves may also do the same. Frustrated homeowners may intentionally cause damage to the property at the bank’s expense. To earn extra cash, some may also take out valuable items such as appliances, lighting fixtures and bulbs, window treatments, doors, knobs and handles, as well as copper pipes. 

As a real estate investor or a home buyer, you should be able to look through these problems and see the real value of the property. To get a better idea of the property’s worth, consult an electrician, plumber and contractor to see how much it would cost to repair damages to the property.


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