A great way to locate investment property is to start going through foreclosure listing with a Virginia real estate agent. Keep in mind however that foreclosures, just like other home purchases, need sound research before an investment is made. It’s extremely easy to burn yourself on a bad investment. While it may seem like a sound idea, there are some drawbacks to investing in real estate of any kind.
There are some fantastic opportunities to get homes at a greatly reduced priced through foreclosure listings, however you need to maintain your guard and avoid making a purchase decision based on the price of the property alone – otherwise you’re not protecting your investment. Keep these things in mind when you’re considering investment:
Eviction problems: Depending on the community, this could be a greater problem than in other areas as neighbors and families try to protect one another from eviction after foreclosure. The lending institution has since defaulted and is going through the legal process to remove the owner however there is still the potential that there may be a previous owner still in the home well after they’ve been ordered to leave.
While they make a concerted effort to have the home empty, you could be stuck with a “tenant” once you make the purchase. Many old homeowners will disregard and ignore the foreclosure and squat in the home. If you end up with an evictee that refuses to leave, you have a problem that could grow into a costly legal issue.
Condition of the property: As you review foreclosure listings with a Virginia real estate agent, keep in mind that those homes are listed “as is”. While many homes are in fair condition it’s possible that some homes could require significant work that isn’t readily apparent without a professional inspection. Repairs aren’t handled by the agencies, as they have no interest in getting top value for a home. They simply want to recoup their costs.
For this reason, it’s important to invest in a professional inspection. While you can’t ask the agency or lender to fix an issue you’ll at least have an idea of what needs to be done if you were to purchase a home. Make sure that the inspection looks in on the smallest details, because costly repairs can quickly eat away at the equity you gained in a discounted sale.
Neighborhood: People tend to consider the area that they’re moving into, but many don’t get into the specifics – often just the look and vibe. It’s a good idea to look into the finances of a neighborhood and the surrounding community if possible. You don’t want to buy an investment home if most of the neighborhood is about to go belly up in foreclosure.
Try to spot homes that scream comfort and relaxation if you’re buying for personal reasons. Of course, if you’re buying for investment purposes then you want to know if a return on your investment is going to come quickly. Take these things into consideration as you work with a Virginia real estate agent to purchase a “new” home.