Government Foreclosed Homes Are Another Man's Treasure.Government foreclosed homes is a segment of the real estate market, through which a new investor can build up a property portfolio, without all of the necessary upfront capital. New property construction is more exciting and appealing, but financing is harder to get approval for, especially in the post-Great Recession era. The future of new home construction is uncertain as the demand by individuals and families has dropped considerably. Additionally, local and state governments are reeling from the cliff-dive of property tax revenues, and can barely keep up with providing services to existing homes, let alone new homes. Foreclosed homes, however, don't need much in the way of new construction; some renovation may be required. The property is there and the home is standing. Services, such as electricity, water, and sewer are in place, so there's no additional, investment needed in contract labor, inspections and permits, and supplies. Further, an investor is better able to assess the future of the property investment, based on the surrounding properties, quality of the schools, and just overall community impression. Prospectors should seek out specialists, who are either veterans who frequently buy these types of properties or a house-hunting firm which has consultants with a proven track record of getting results for prior customers. In addition, if the home is going to be used as rental property, a buyer should seek out property management programs which specialize in the areas of payment collection and other duties, such as eviction; these companies will have a full understanding of the legalities that go along with renting out property. Investors should visit the website of one of the federal agencies which handles home and city development, for foreclosure listings, the U.S. Department of Housing and Urban Development (HUD). The website has a wealth of tips on the foreclosure process. Additionally, HUD may be able to offer loans to help buyers with the purchase. Government foreclosed homes are a steal for any investor because of the drastically reduced pricing. More so, the community and local real estate market benefits as well from having one less unoccupied dwelling driving down home prices. In a cyclical kind of way, as more investors seek out these types of properties and whip them into shape, the value of the surrounding properties will rebound and appreciate--which only helps drives up the value of the foreclosure.
REFERENCES: 1) RE/MAX of New Jersey: Foreclosures, http://www.remax-nj.com/investing-in-real-estate.aspx#foreclosures 2) Investopedia: Foreclosure Opens Doors For Real Estate Investors, http://www.investopedia.com/articles/pf/07/hot-foreclosures.asp 3) The Foreclosure Info Site: Government Foreclosed Homes, http://www.theforeclosureinfosite.com/Government_Foreclosure_Home.html
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