People buy foreclosures for a lot of reasons: to live in, as fixer-uppers, to flip and for investment purposes. The current real estate market isn’t so hot for quickly selling foreclosures at a profit. Instead, consider purchasing foreclosures and holding on to your investment until the market turns around. In the meantime, earn money by renting the houses.
Here are 5 things to look for when buying foreclosures to rent out:
1. Most foreclosures are nice homes that, for one reason or another, the sellers have had to let go. With the variety of houses available, take your time and find a property that doesn’t require a lot of major renovations, unless, that is, you’re a handy man and enjoy fixing up homes.
2. Figure out the costs of the potential rental property and then look at the average rent in the area. If the rent would cover the costs and a little over, it’s a keeper.
3. Many of the homes have been updated with more energy efficient appliances. Energy efficiency is better for you, as the landlord, and better for them, as the tenant. Due to the current push towards environmental concerns, if you buy a home that isn’t updated, you may eventually want to do so. Cut through the update havoc and look for energy efficient homes.
4. Like you would with any potential home, look into the cost of utilities, property taxes and so on. Make sure that you can handle the costs in the eventuality that the home stays empty for a while.
5. Make sure the home you look at is “tenant friendly”. If there are a lot of breakable fixtures, big bay windows or glass enclosures, you might not want families living there due to the cost of repairs. Families are the highest number of renters, so look for homes that would withstand children.
“Accidental” landlords – Those who hadn’t planned to rent, but did because they couldn’t sell – are a growing population. Instead of being accidental, plan for it. Look into buying foreclosures as a rental investment. There might be a home just waiting for your tenants.
If you need help finding the perfect foreclosed home, give us a call today at 909.373.2200 or email me us at Homes@MainstreetGroup.com