Investing in repossessed properties can be an excellent way of getting a good return, but like any venture into the property investment market, you need to know what you’re doing if you want to avoid getting your fingers burned.
What may seem an absolute bargain at the auction may turn into a money pit if you’re not careful so here are some things to keep in mind:
Repossessed properties have always been attractive to property investors and if you do your homework, excellent returns can be made
Do your due diligence – by definition, repossessed houses are properties that lenders have taken back from the original owners because mortgage payments have failed. This means that the lender wants to get shut of them quick to get back their money. This can often result in the process feeling a bit rushed and you will be pushed to sign on the dotted line as quickly as possible. Don’t let this happen. Do your due diligence like you would with any property purchase and make sure that you are happy with all aspects of the transaction before committing yourself.
Weigh up the costs – the property may well be significantly below the market price but there is a reason for this. What kind of condition is the property in? Repossessed properties are often in need of a major refurbishment and sometimes they’ve even been vandalised by the previous occupants. Will the costs involved in renovating the property be worth it in the long run? These are points you will need to seriously consider.
Where is the property? – repossessed properties can often be in run down areas that don’t have a great reputation. These houses, even when refurbished, may be difficult to sell on so make sure you understand the location of the property and do your research on what the property market is currently like in that area.
Get legal advice – when you purchase a repossessed property, the documentation available can be limited so it’s always a good idea to get legal advice from a good solicitor before committing to the transaction.
Repossessed properties have always been attractive to property investors and if you do your homework, excellent returns can be made. To find out more, contact Barrows & Forrester Investments now.
