If you’re on a strict budget or looking out for a good investment property, foreclosed homes can be an appealing choice. But, there are five steps you can take to protect the investment and avoid future issues.
- View the Home in Person: Take a close look and take a tally of how much you will need to spend on improvements. The landscape and outward appearance is a telltale sign of how long the house has been vacant.
- Winter Vacancy: If the house has been vacant during the winter months, ensure that it’s been winterized to avoid tens of thousands in plumbing repairs.
- Neighborhood Walk: Walk around the neighborhood to determine its “health”. If you’re planning on flipping it, do their homework by looking for a safe established or “up & coming” neighborhood with similar homes on the street in well-kept condition.
- Hire an Inspector: An inspector who is looking out for your interests has a trained eye which can point out latent defects not visible to the naked eye. I would strongly suggest a termite inspection as well. The inspector’s charge of about $400-500 is well worth the cost as knowledge is power. It could save you thousands in the short term.
- Realtor on Your Side: If you have your trusted realtor by your side, she can provide you with an up to date market analysis. Having local market data in hand should help you make an informed decision.
Go into buying a foreclosure with your eyes wide open.