I read an article on Yahoo Finance yesterday that opened with the line, "The real estate market is so awful that buyers are now scooping up homes for as little as $1,000." I'm not trying to down play the heartache that faces familys who have gone through foreclosure but, this is not an "awful" market if you've ever considered investing in real estate!
The Yahoo article does go on to explain the deeper truth behind the headline. Most of these "steals" are in areas of the country that have experienced massive job loss, such as in the Michigan auto factories. Also, the "$1000" homes are in need of major repair and many buyers are being required to sign an affidavit promising they will fix the houses up. The repair costs can be $15-$25,000 but, even then, you've purchased a house for only $26,000! Owning long-distance rental properties can be stressful because, let's face it, you can't to "secret drive-by's" to check up on your tenants! Finding a reputable property management company is paramount in this situation.
Why would you, a part-time real estate investor in the Northwest, want to buy property in a place like Michigan? Isn't it risky? Stressful? A hassle? Yes! But it can also lead to a greater profit margin than you could expect investing closer to home! Property values here have held much more steady than in other parts of the country so you pay much more up front. Foreclosures have not been as rampant here as in other parts of the country so the rental market hasn't increased as much. Most of these hard hit areas come with large rental markets. There's the rental market that's always there, plus the renters that, until a recent foreclosure, were homeowners. It may sound risky to agree to rent to someone whose home was foreclosed, and in some cases it would be. There are, however, a few things to keep in mind. Just because someone wasn't able to pay their mortgage does NOT mean they won't be able to pay their rent! Mortgages typically have much higher monthly payments than rent. There are also taxes and insurance that come with home ownership. If the person had an adjustable rate mortgage, their payment may have jumped to an unaffordable level within recent years - for the vast majority of Americans an increse of only $100 per month can mean the difference between "affordable" and foreclosure! So, with proper credit and background checks you can rest easy when renting to someone who had a home foreclosed.
By working with a local Realtor you trust there's not even a need for you to ever GO to the state you're investing in! Your agent in Vancouver networks with trustworthy agents throughout the country and can refer you to someone who knows the market you're buying in. That agent can also help you locate trustworthy contractors to do any repairs and property managers to handle renting the house. If you'd like to learn more about taking advantage of this buyer's market, call the JMC Group at 360-609-6775. Or go to the "Contact Us" portion of our website at www.MyRealtorIsJamie.com. We are here to help!
Comments(0)