With so many foreclosed homes on the rental market it’s easy to imagine picking up a property or two at a deep discount and turn it into a money making rental unit. But it’s not that simple, there are some things to consider.
Like all home purchases, location is key. If you’re looking to get quality renters you have to be in a location that they want to be in. It’s not a deal if you can’t get a renter.
Bank or Homeowner
Will you be buying the home from a bank or from the homeowner? If the home has already been foreclosed upon then you’ll probably have to deal with the bank. If it hasn’t quite been foreclosed yet you might be able to deal with the homeowner, and this can be an ideal situation.
Inspect the Home
Do as much due diligence as possible inspecting the home, even chat with neighbors to find out about the owner’s habits. People that have foreclosed homes often do not put the care and pride into them as other homeowners.
Often landlords become overwhelmed by economic crises, if the current homeowner is a landlord then there’s a good chance there are already tenants. Learn everything you can about their lease and if you’ll still have to abide by it.
Buying a foreclosed home as an investment can be a lucrative idea as long as you do your homework and make sure it’s a sound investment.