6 Things to Watch for in Foreclosed Properties
The key to foreclosure investing is to know what you’re getting into from the start. Everyone has their personal preference in terms of how much work they want to do. At least if you know about certain issues with the property you can decide whether to walk away or simply price it into your offer. Before we get into the specifics about what you should be looking for and asking about, we have this one tip for you. Always be sure to visit the property yourself. You should never buy a property without seeing it no matter how attractive the price tag is. By taking some time to see the property, you will get a sense of the surrounding neighborhood (particularly its value), as well as the house itself. Now we will discuss the six things to consider when investing in a foreclosed property.
The first thing to find out is the length of the vacancy. There’s a general rule of thumb stating that the longer the house is empty, the more likely it is that it will have damage. Keep in mind that the longer it has sat, the more things could have happened to it. This includes animals entering the home or any other type of damage. Of course, this is just rule of thumb and you won’t know unless you actually see for yourself.
Look into the history of the property. You can request documentation outlining the history of the house. This includes any defects, repairs, maintenance and essentially anything else that would be discovered during an inspection. This is always a good safety measure since you never know what you could find. For all you know, the previous owners may have neglected it or tried to hide something. The bottom line is that it’s better to check it over rather than assume it is fine.
Ask if it was winterized. Before we get into certain aspects of the property, you should inquire as to whether it was winterized. It would be a shame after all if you went to turn on the water and ended up cracking a pipe. Not to mention that the crack would lead a leak causing even more damage and work on your end.
Condition of plumbing. This is where damages can get quite expensive. Not that you should rule it out if there’s plumbing damage, but you should be aware if it exists. This includes everything from the pipes, to the toilets, sinks and even the flooring around these areas. If a leak has occurred, then you’ll need to identify all the areas of the property that have been affected.
Electrical and heating utilities. Dust, dirt and who knows what else collects over time and can clog the ducts. For all you know an animal could be hiding in there. This is definitely worth looking into beforehand, again to know if a repair is needed.
Well, this you will see immediately upon visiting the property. Again, this is another expense if work is needed.
A final note is that it never hurts to bring an inspector. Sure, it costs a few hundred bucks but a professional may spot things that you otherwise might not have noticed. The key to successful foreclosure investing is to know what you are getting into so you can price the property accordingly. Following these tips and consulting an inspector will help you do exactly that.
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