Buying Foreclosures to use for Investment Property
A lot of investors talk about buying bank owned real estate as a chance to purchase undervalued property to put it on the market at a higher price. But there is an alternative property investment option that many times goes unnoticed. It’s the rental market.
What do REO properties have to do with rentals? A lot, actually, according to one San Jose property management company. Let’s drill down to two major points here: Purchase price and rental price.
Foreclosures affect purchase prices
First, nearby foreclosures have a big effect on the price of a home, which affects the investment value of the property. If you are not able to purchase a property at below market value, you will have a hard time keeping a positive cash flow on the property as income property.
Foreclosures have an impact on rental prices
Second, foreclosures have a dramatic effect on the dynamics of the rental market by kicking former homeowners into marketplace, creating a demand for rental properties. When a larger quantity of potential renters competes with a limited number of rental properties on the market, monthly rents are going to increase or at least remain stable. This can help provide a stable cash flow for the investment.
Because of these foreclosure factors, savvy investors are showing up in droves to participate in the foreclosure market. In fact, few rental markets nationwide are suffering, and that’s precisely because more people than ever before are being forced to rent due to circumstance.
One Colorado Springs property management firm says that rates of vacancy have gone down steadily in 2010 over 2009 rates. This is good news for investors interested in purchasing Colorado Springs rentals as the market is seeking to correct itself from the peak experienced in 2006.
What Bank Property Foreclosures Have to Offer to First Time Buyers. For investors and regular home buyers who are interested in purchasing FHA foreclosures for sale, there are certain things that they need to know first to make sure …
It means that they are going to be foreclosed and you might buy them for the amount owed on them.
Is this the Stimulus Package favored by PKR-PR??
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1. In 2008 Stimulus Package was hurriedly put together with RM5 billion channeled to prop up the stock market
2. Propping up “friendly “corporations, massive spending on less than urgently needed infrastructure projects, and handouts to party warlords
3. Ad hoc packaging of projects with long gestation periods was clearly inappropriate
4. Size of the package is unwieldy
5. Loan for businesses account for RM25 billion or 41 percent of the package, helping industries struggling with debts does not boost consumption like cash vouchers and bonuses or tax waivers.
6. Value Cap given RM5.0 billion to support the stock market
7. Channeling of funds to UMNO linked entities and the various warlords, nothing much provided to cushion the impact on the SMEs or the laid off workers.
8. No measures to reform
9. Over emphasis on infra-structure
10. SMEs marginalized. Vagaries of the NEP and the lack of incentive to private sector
11. Training and job placement programs inadequate
12. No safety net for unemployed workers, no unemployment benefits
13. Cheap and illegal labor continue to flow in to help employers with cheap labor
14. 63,000 to be recruited into government but public sector is currently already bloated and inefficient, outsourcing of services to private sector should be explored
15. Strengthen universities by hiring foreign lecturers
16. RM27.9 b proposed subsidies but no details given
17. RM480 m to ensure taxpayers do not have to pay higher toll rates when the aim is really to support cronies
18. Launching of Savings bonds to generate income is odd when the aim should be to increase consumption and increase consumer demand
19. No direct assistance to retrenched workers, tax exemptions paltry
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No amount of finger pointing is going to help the country weather the economic recession. Apportioning blame may help win elections. But right now we need to stimulate the economy, avoid a depression and put a stop to rising unemployment.
I have yet to see PKR-PR come up with a stimulus package of their own – only a criticism of what is wrong with the BN Stimulus Package.
We know what is wrong with the BN stimulus package. We know about the corruption, bad governance, non-transparency, a judiciary that is not independent etc. These are long term changes but the economic crisis is immediate.
I don't think you guys really know what needs to be done. For example, how could the hiring of foreign lecturers help the country weather the recession?? Every country and every economy has its own problems because each is different. The global recession must have hit Malaysia's export industries in a big way. Yet the speech by LKS did not so much as mention them and what is needed to help these industries but only to say that SMEs and the private sector are not getting the help they need.
In the U.S. it is all about bailing out the property companies and halting property foreclosures and declining property prices, putting more money into the banking system, and putting money in the hands of the consumers through rebate checks, reducing taxes etc. Taxpayers have received their first round of rebate checks of between US$1,200 to US$600. The second round of rebate checks are coming any time now.
I do not share the same confidence as U.S. President Obama whose Treasury Secretary recently says that the country will begin to come out of the recession in 2010. I don't think anybody knows. All they could do is appear confident and hope that their measures kick in early enough. The truth is they will not kick in early enough, it takes time and meanwhile the economy will plunge deeper into recession.