Learning how to buy foreclosure property can be a very educational experience. You do not have to be an experienced investor in order to do this. No indeed, even first time home buyers are looking to the foreclosure market for their housing needs.
The foreclosure rate has risen to massive level. This amount of foreclosures for sale has not been seen in the American property market for nearly two decades. Sadly it has been projected that by the end of this year 2 million homeowners would lose their homes. One question that any potential home buyer should ask them-selves is, how can I turn this crisis into a valuable investment opportunity? The answer is relatively simple, learn about how the foreclosure market operates, and if you have a good credit rating and a bit of spare cash, give it a try.
One of the reasons that so many foreclosures are taking place is unemployment. Actually apparently this is the number one reason. Compound this together with adjustable mortgage rates, the sub-prime loan fiasco, expensive gas and food prices and you have a recipe for disaster. Unscrupulous lenders have been indulging in bad lending practices. Lending money to poor risk individuals who have a bad credit history is not good business practice. 40% of the individuals who could not meet their house payments cited not health insurance, and high medical costs.
Now you might ask how this situation could possibly present itself as an opportunity. Once you learn how to buy a foreclosure property, you will see that even if it cannot be sold straight away for a profit, it can be rented. Making sure that a house does not sit around empty is a service to the community, once the property market revives, you will be able to sell it at a profit. Amassing property is a great way to amass wealth, you could develop the property, rent it, life in it or even use it as a tax shelter.
There are some things you need to look out for when buying foreclosed property. One very important factor is location, the poor location of a house means that it might be difficult to rent or re-sell, even if the house is beautiful. If looking for your first foreclosure house, buy in a good neighborhood.
Check out nearby amenities such as schools, parks, shopping precincts and development. All these factors count when trying to resell a property, they make very good selling points. How is the condition of the house? Small repairs are often easily done but major repairs would mean that you might lose any profit made. Basically don’t worry if the house is shabby as long as it is sound structurally.