Even as the economy is still waiting to recover fully from the 2008 recession, there are still ways for individuals to find profitable business opportunities. For example, one can buy storage units and rent them out to people who need a place to store belongings that won’t fit in their home. But another type of business opportunity that has been popular lately is buying foreclosed homes and selling them at a profit later on.
There are thousands of foreclosed homes that are sitting empty all around the nation. Due to a severe downturn in the housing markets, these properties are now in the hands of financial institutions, who are having a lot of trouble finding buyers for them. This causes quite a problem for the bank.
If a home sits unoccupied for too long in certain areas, it could become a magnet for squatters, or worse, criminals who will turn it into a drug den. For this reasons, many banks are willing to sell off foreclosed property for a fraction of what the house was worth before the housing crisis hit.
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Due to low prices of many properties, the possibility of flipping them for profit comes to mind. However this is not as easy as it may sound. While some of these homes are in relatively good shape, many have suffered a lot of damage, such as broken windows and holes in the wall. In a lot of cases, everything that had any resale value, such as copper wiring, appliances, plumbing fixtures, etc. has been ripped out.
Someone who wants to resell the property later on would need to invest in renovations to make it look habitable for a buyer. This will also increase the resale value of the home.
Many investors who buy into foreclosed properties will fix them up and then rent them out while they wait for housing prices to start going back up, at which point they hope to sell the property at a profit. However, this could take a few years to happen. While it may be possible to make a few thousands of dollars of profit quickly by buying a foreclosed home, renovating it and then finding a buyer, this is the exception and not the general rule.
Therefore, flipping foreclosed homes is seen as a more long term investment, as it is one that may take a couple of years before it pays off.
