What are the Advantages of Buying Distressed Properties?

With the real estate market full of potential buyers and sellers, negotiating units with soaring prices, one would be lucky to find property at lower than market prices. This is usually the case with distressed properties, which are sometimes disregarded by most buyers or investors.  But Let us tell you, some distressed properties can actually be hidden treasures!

What is a Distressed Property? 

A distressed property is any property that is under foreclosure or repossession. Distressed properties are ones whose owner cannot, or is unwilling, to keep up with its mortgage payments. As their name implies, these properties are sometimes found in a neglected state, because their owners didn’t want or weren’t able to finish their construction works or keep up with their maintenance. In most cases, distressed properties are usually found in poor condition.  

How Can I Spot A Distressed Property? 

You can easily spot a distressed house if you look out for things like:

  • An unoccupied old house 
  • Neglected exterior (Faded paint, broken windows,  doors, and shutters)
  • Unmaintained yard, overgrown with weeds 
  • Notices or posts on windows 
  • Full and uncollected mailbox 

Because they are generally in poor conditions, most people struggle to sell distressed properties. If you own a house that needs several repairs and improvements, but cannot find any buyers, you can find the right buyers for it. The real estate titans at KM Home Buyers explain the easy steps to take to get cash for your property. Whatever the condition, you can actually find a way to get that house off your hands because there are several investors or buyers who can be very interested.  

Why Buy a Distressed Home? 

There are many advantages to distressed properties:

1. Lower Price

Of course, this is the number one reason why people buy distressed homes. This is generally due to the fact that homeowners who are about to undergo a foreclosure are eager to get their debt paid off. As with lenders or banks that already possess foreclosed homes, they are more likely to sell those homes at a lower market price.

2. A High Potential for Profits 

Buying a distressed home is actually a smart investment as real estate prices go up with time. Another thing is that you can renovate it and do the needed repairs, then sell it a higher price. One of the first things you need to do is conduct residential roofing inspections to get an accurate information of the roof’s condition. Distressed properties usually have leaky roofs which can cause water damage. If this is the situation you find yourself in, be sure to work with a water damage restoration company. Also, if there are signs of rodent infestations in the property, a rodent control service needs to be contacted.

3. More Negotiating Power 

Due to their maintenance costs and the need for several repairs, you will have the upper hand when negotiating the price. You are more likely to come out with a winning deal if you are negotiating for a distressed property. 

4. Easier Financing 

Buying a distressed home also means you are more likely to end up with lower closing costs, interest rates, and home mortgage payments. Purchasing distressed homes can be very profitable and a smart investment. If you invest in the right property, you can turn an old, neglected house into an excellent property. Yet, you should always make a well-informed decision before buying a distressed house and understand the risks associated with it.