Real Estate Investment Strategies: Buy Foreclosure for Rental Property
August 29, 2010 by JoelC2009
A lot of investors talk about buying bank owned real estate as an opportunity to buy undervalued property to flip it at a higher price. However, there is another property investment technique that often gets less attention. It’s the rental market.
So what do bank owned properties have to do with rental properties? A lot, actually, according to one San Jose property management company. Let’s focus in on two important points here: Purchase price and rental price.
Foreclosures affect purchase prices
First, foreclosures in the neighborhood have an effect on the purchase price of a home, which in turn affects the investment potential of the property. If you are not able to purchase a home at less than market value, you will have a difficult time maintaining a positive cash flow on the property as income property.
Foreclosures affect rental prices
Second, foreclosures have a dramatic effect on the rental market by ejecting former homeowners out into marketplace to create demand for rental properties. When a higher number of potential renters competes for a limited number of properties to rent, rents are going to increase or at least remain relatively stable. This can help ensure a stable cash flow for the property.
As a results of these foreclosure ROI factors, savvy investors are stepping up to the plate to participate in the foreclosure as rental market. It’s a fact that very few rental markets in the United States are suffering, and that’s because more people than ever before are being forced to rent.
One Colorado Springs property management firm suggest that vacancy rates have gone down steadily in 2010 over 2009. This is great news for real estate investors who are interested in buying Colorado Springs rentals as the real estate market seeks to correct itself from the peak of the market in 2006.
i hope you're right as well – if it weren't a home game, i'd be far more concerned. special teams have got to step it up. punting and kicking units are allowing too many yards on return. penalties are eating us up. great news – we've got multiple threats now with offense cause so many of our guys can run the ball and catch the ball. we've got to be more disciplined on the penalties and we've got to have better refs.
Thanks for sharing great news! @8zz &
The real estate market in Las Vegas is one of the worst in the country at this point.
Perhaps once the local market improves you will have more luck finding people interested in your ideas. All you can do until then is to keep looking for investors, just don't get discouraged because you are receiving not valid responses.