'Thar's gold in them thar hills!'
No one knows where "Thar's gold ..." was first said, but in spite of its ungrammatical content, it's as exciting today as it was in the 1800s.
People are still prospecting for gold, but now they are finding it in the form of real estate bargains. Sometimes a foreclosed home in a nice neighborhood can be bought for one-third to one-tenth of its value.
The National Association of Realtors reports that nearly half of sales at this time are properties that have gone back to the lenders, or they are homes sold at a bargain price by the owners in order to avoid foreclosure.
Some 401(k) investors see it as a way to eventually make up for money they lost in the stock market. Buyers know they are taking something of a risk, but think they can rehab and rent promising properties, then sell them at a later date for a significant profit.
One couple bought a foreclosed house for $15,000 in a reasonably good neighborhood. They invested $30,000 in updates and repairs. After that, with the help of a real estate agent, they sold it for more than $80,000.
In cities where many homes are for sale or foreclosed, such as Detroit, Phoenix and Orlando, there is a shortage of rental properties. Those who buy and repair one or more homes are able to make a nice profit on the rent even after paying for property taxes and upkeep.
Words of advice for owners of unoccupied houses: Protect the property from thieves and vandals.
Pay a neighbor $100 a month to park in the driveway and keep an eye on the house. Install an alarm system and leave a radio on.