Potential Upside of the Foreclosure Crisis
September 12, 2012
By Stacey Biemiller Maisch
Today’s economic instability has Americans cringing at news of foreclosure, unemployment, and inflation. While most are worried about maintaining the status quo, some are seeing the potential upside of the housing crisis.
The real estate market has changed to offer unique opportunities to small-time investors who don’t mind getting their hands dirty. The big banks who now own many of the foreclosed properties aren’t selling them off in large lots as many had anticipated. Instead, as the Wall Street Journal reported, they’re holding onto the properties and trying to make more off individual sales.
That means more foreclosed properties are available to individual buyers. If buyers know what to look for, they can turn the country’s misfortune into their own dream. One search along the Jersey Shore, for instance, shows thirty different listings for beach homes under foreclosure.
Whether looking for an investment opportunity or a family getaway, smart buyers will view foreclosure properties like flea market finds. The value in these homes is their location. Something that won’t change no matter where the economy heads. Foreclosed properties go at a fraction of their worth. Even those who have never been savvy investors before can benefit.
Families who don’t mind a little renovation work can take advantage of the crisis in a lasting and meaningful way. A vacation home may have been a pipe dream ten years ago, but now is a reality when foreclosed properties are considered.
With a 20% down payment on a foreclosure price, buying property is now a real option open to the everyman. (Just be prepared for the increased paperwork and turnaround time that comes with foreclosure purchases.)
An affordable foreclosed beach property can serve as a getaway for families with children, making more expensive summer vacations unnecessary. Buyers can funnel those funds into the renovation process instead. While fixing up the house for investment purposes, families can enjoy time down the shore while learning valuable handyman skills.
After a few years of work and enjoyment, a regular family has options no other investment could offer. Do they sell they flipped house for a profit, or keep the property for vacation and possibly rental income? Either way, a smart investment now equals a big return later.