Buy Foreclosures for Income Property
Many people talk about buying foreclosures as a chance to purchase undervalued property to put it on the market at a higher price. But there is an alternative real estate investment choice that sometimes goes unnoticed. It’s the rental market.
So what do REO properties have to do with rentals? A lot, actually, according to one San Jose property management company. Let’s focus on two major points here: Rental price and purchase price.
Foreclosures have an impact on purchase prices
First of all, and this is important, nearby foreclosures affect the value of a home, which affects the investment potential of the property. If you are not able to acquire a home at less than market value, you will have a difficult time maintaining a positive cash flow on the property.
Foreclosures have an effect on rental prices
Second, foreclosures affect the rental market by ejecting former homeowners into marketplace, creating a demand for rental properties. When there is a higher number of potential renters competes for a limited number of properties to rent, rents are going to go up or at least remain stable. This can help ensure a stable cash flow for the property.
Because of these foreclosure ROI factors, smart real estate investors are showing up in droves to take part in the foreclosure investment opportunities that abound. It’s a fact that very few rental markets throughout the U.S. are suffering, and that’s because more former homeowners than ever are being forced to rent due to circumstance.
One Colorado Springs real estate company is saying that vacancy rates have decreased steadily in 2010 over 2009. This is good news for real estate investors who are interested in purchasing Colorado Springs rentals as the real estate market is seeking to correct from the peak experienced in 2006.
This entry was posted on Monday, May 30th, 2011 at 4:18 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.