Welfont Reviews – Buying a Distressed Property? Some Things to Keep in Mind
Despite the ups and downs of the real estate market, real estate remains an excellent investment and a great way to hedge against inflation. As a result of the tumultuous market in recent years, there are many opportunities to purchase a distressed property – this option is not without some risks and so anyone considering this option should be sure to consult an industry expert like Welfont Reviews before taking the plunge. Here are some things to be sure to explore.
Price vs Cost
One of the great advantages of purchasing a distressed property is that they are generally priced to sell, and it is the case that a great deal can be had. At the same time, it is important for a potential investor to make a careful calculation of the price compared to the costs. This is because many distressed properties require a considerable investment – they may have been neglected for many years and need to be completely overhauled, or they may simply be in need of some updates to be market-ready at the best price. Either way, there will additional costs beyond the price that an investor must consider. Some people may be willing and prepared to do this work themselves and in this case many of the extra costs can be avoided. If you will be relying on contractors to do this work for you, be sure to get an estimate from someone you trust as you calculate your offer.
Whether you are buying a distressed property with the intention of living in it yourself or are instead buying with a plan to flip it or rent it out, you need to be aware of the fact that it can take more time to purchase a distressed property – especially if a property is in foreclosure, there may be a great deal of paperwork required to complete the deal. Additionally, there is the near certainty that repairs and renovations will take longer than expected. If you are purchasing a distressed property with the specific intention to flip the property, you need to be mindful of the fact that it may take a considerable amount of time for the market to improve so that an investor will be able to recoup the initial investment – particularly if there was a significant investment required at the outset.
Because distressed properties are priced to sell, they offer an excellent opportunity for cash deals. A cash deal may be desirable when interest rates begin to rise – the advantage of a sale-priced property can be quickly be lost with rising interest rates. Moreover, when owners are looking for a quick sale, a cash offer will be more attractive than an offer contingent on financing. Moreover, it may often be the case that a cash offer is the only option if a property is so neglected that it does not qualify for a mortgage.
Overall, the purchase of a distressed property can be an excellent investment if you have patience and vision.