Despite the drop in real estate values since 2007, the long-standing principal that real estate is a great investment still holds true. The only difference between now and then is the fact that investors need to employ a few different strategies if they hope to see maximum returns. Investing in repossessed houses is one of those strategies.
The key to making money in this sort of investment is to know what you're doing. Far too many investors don't know what they're doing, resulting in unnecessary financial losses.
Statistics from December 2012 showed residential property values had dropped 20% since their 2007 peak. The trend of low prices continues today. Yet homeowners trying to sell their properties are generally looking for prices that are unrealistically high, making it difficult for the investor to complete standard transactions and still meet investment goals. Repossession properties are the answer.
Repossessed houses are attractive to investors because they can be purchased at below market value. From the outset, an investor has paper equity the day the sale is complete and the title transferred. The equity then becomes leverage that the investor can use to his/her advantage in making future investments.
The key to taking advantage these properties is negotiating the right sale price. A good target of 25% below market value gives you enough room to turn over a property and be ready for rental without while still being ahead financially. From the first day of tenancy, the property begins returning on your investment - a return that represents a higher yield than you can get with other types of investments.
Hopefully we have managed to convince you that buying repossessed houses is a great investment with long-term yield. However, now we must present you with a warning to be careful about what you buy. Remember that by definition, repossessed houses are properties that were taken from their original owners due to lack of payment.
Here are some things to keep in mind:
Repossessed houses are an excellent investment option when those properties are used for rental income. Fruitful Property invests over £30,000 every month to find the best real estate investments in the country. Furthermore, we handpick every property offered to our clients to ensure a deal that immediately establishes equity. If you are ready to start making money on real estate rentals, contact Fruitful Property today.
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“Since 2010, Fruitful have helped me buy five post-repossession investment houses close to London. I am very busy growing my company and would never have had the time to find these…
“Having worked with Fruitful to purchase 3 separate ex-bank repossession properties, I have been very pleased with the purchases, all of which have been let to professional tenants…
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