The recession is here and is steadily falling. This doesn�t mean you
can�t make money anymore. This is a buyer�s market and the recession has
not hit it's low YET. In fact, now is the absolute PRIME time to
purchase.
Real estate is one investment that is desirable by anyone. Everyone
needs a place to live. If you cannot afford to purchase a home of your
own, you have to rent. One way to make money in a down real estate
economy is to buy a home on the verge of foreclosure where the residents
are still living in the home.
By purchasing a home that is on the verge of foreclosure, you can allow
the past owners to stay in the house and continue to make payments to
you as their landlord. You will be getting all of the tax benefits as
well as be the ultimate owner of the home. You can refinance the
mortgage so that the interest rates are lower and the mortgage rate is
much less than what the people were originally paying. You can help them
out of their bind by lowering their monthly rent payments and allowing
them to stay in their home for a period of time until they can afford to
either buy the home back from you or move on.
If they cannot afford to stay in the home any longer, you can rent the
home out to other people. The home will be a long term investment for
you as well as a tax write off. If you are preparing to invest in real
estate in this manner, make sure that the home is located in a solid
area where the property values are increasing. In a few years, the
market should rebound making your home worth a lot more than when you
purchased it.
In most cases, a person who is on the verge of foreclosure has no idea
what they can do to help themselves. If they have children who are
attending a nearby school district, they do not want to relocate them.
You can help them and make a wise investment if you purchase the home
before it goes into foreclosure. This is known as the short sale and you
will be merely assuming the payments as well as the incurring the debt
from the bank. Since banks rarely lend out more than 80 percent of the
value of a property, you are already getting, at the very least, a 20
percent discount off of the home. The longer the people have lived in
the home, the less they likely owe for the mortgage. You will assume the
mortgage payments, refinance the property at a lower interest rate and
then rent the home to them.
This will make the people who are on the verge of foreclosure happy to
be able to stay in their homes as well as have the possibility to make
you some money. If they have gone into foreclosure because of some
suprising circumstance that will be alleviated, such as someone losing
their job, you can make them an offer to rent to buy, which means that a
portion of their rent can be used as a down payment if they want to buy
their home back when things get better. It is very important to have a
real estate attorney draw up any rent to own agreement. If done
correctly, either way, you can make a solid investment and have renters
who will most likely take care of the home.
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