While the market is starting to swing up once again, the foreclosure crisis is far from over. For property management professionals, this presents an opportunity to find exceptional deals on single-family homes. Expand your portfolio and provide homes for new families by investing in single-family foreclosure investment property.
Foreclosure Investing Creates Housing Opportunities
Purchasing a rental property opens up opportunities. According to the National Multifamily Housing Council, more than 35 percent of the US population rents, including more than half of the population under age 30. By renting properties, you can help tenants from a range of age groups and backgrounds, from college students and young professionals to families who want to raise children in a safe neighborhood. A foreclosure investment property isn't just a business opportunity for you, it's an investment in people who find renting to be the best choice for them.
Foreclosure Finance Tip: Look at the Neighborhood
Before you purchase a foreclosure property, evaluate the neighborhood as a whole and consider your historic target markets. For example, if you work with a lot of millennials, consider if the neighborhood fits their needs. Is it close to a college, or does it have the recreational and educational amenities desired by a growing family?
You should also examine the market in the area. Are there many foreclosures? Is there a high number of rentals on the market? According to the NOLO blog, "a foreclosed property in good condition located in a neighborhood with few other foreclosures will most likely fetch higher rent."
Consider where the neighborhood is headed in the future. Is it gradually gentrifying, so that properties that are run down now will be considered valuable and desirable in a few years? Can you purchase multiple properties and help develop and grow your own neighborhood? As with any property investment, examine the entire neighborhood and its trends before making a decision.
Moving Into a Foreclosure Investment Property
It's important to be aware of the potential extra costs to get a home up and running again, so conduct a complete inspection before purchasing. Some foreclosures may have been recently vacated, while others have been vacant for some time. From lawn and garden maintenance to larger structural concerns, you'll need to do the due diligence to ensure that the home is a good investment. Determine what urgent and ongoing maintenance you'll need to accomplish to get the home looking like your ideal rental property. There are advantages to purchasing a fixer-upper, as long as the fixing doesn't take an extraordinary effort. You can purchase a home at a lower price, add value to your new property, and make it an asset to the neighborhood.
Investing in Foreclosures: Tips to Help You Understand Your Assets
Use your experience to evaluate the business opportunity, then monitor your findings over time using Propertyware's accounting software that helps you track the expenses specific to each individual rental property. Over time, track your initial investment, maintenance investments, rental income, and tenant turnover to determine whether foreclosures tend to be a good investment for your business. This can also help you make better choices if you choose to purchase another foreclosure property.
Your rental property management business is growing. Whether you're looking for financial tools to help you with foreclosure finance and foreclosure investing or you're trying to determine whether your past purchases have paid off, Propertyware can help. Rental property management tools are our specialty. Learn more and get pricing today.