There are many investments that are made in real estate, most which are expected to allow the price of the property go up. However, sometimes the value of a property starts down. If you have run into a property that is like this, you will want to decide if it is worth investing in. Distressed property is one of the questions that several ask when investing into real estate.
If a property is distressed, it means that it has not had the care and attention needed by the previous owners. Most likely, the home is part of a foreclosure, abandoned home, or other problem and may have not been lived in for a specified amount of time. Any distressed property will need a lot of attention given to it if you decide to invest in the property.
Before looking at this type of property, you will want to make sure that it will be worth your investment. While a distressed property will usually go down thousands of dollars because of the quality, it may not be cheaper. It will be expected that you put a specific amount of work and money into the home in order to repair it and get it back up to being part of the market.
Several years ago, before the crash, a lot of people, made a lot of money off of property flipping. Buying a property that needed some TLC, quickly making the improvements and reselling it for a profit. I flipped several properties that were quick, lucrative turnovers. There are still properties ripe for flipping today, people are still making money off of that method, however, the game has changed a bit. I feel as though it is a bit riskier now that it was 5 years ago.
If you are able to get an extra loan, have more money, and want to fix up a home, then a distressed property is for you. However, if you don’t want to put in the extra effort, then finding this type of property is not likely for you. You will also need to decide whether you will be able to profit off of the investment in the long run according to the neighborhood, market, and your intentions for using the property.
While a distressed property can be a benefit, it will need to fit your goals and your lifestyle in order to be an effective investment. As long as you have assessed your financial stability and goals and are able to put in the extra money, time and work, you can take a distressed property and turn it into what you want.
Northern Great Lakes Property Management