Distressed Houses! Are they worth the investment?
Real estate investors find Distressed Property worth investing in for the benefits and the impressive returns it brings. The market for distressed houses is gaining rapid popularity and thus is a lucrative opportunity in the real estate market. With proper strategies, distressed houses can be turned into high-amount selling properties and gain a good profit margin. Many people, either property insiders or new investors find investing in distressed properties profiting.
When looking for investment options in property, distressed properties have, of late, make for a prominent option that can bring significant returns. However, distressed properties cannot be found in the normal property listings, to trace the available for sale distressed properties one should look for the foreclosure listings, bank auction listings or Probate Sale listings. Through these sources, a distressed house in a prominent location can be identified, investing in which can be monetarily fruitful. Moreover, the house flipping of distressed houses in a distinguished locality can also help to flourish the locality with a beautiful house.
Distressed houses as an investment:
If you are considering investing in a distressed property, you should be aware of the certain pros and cons of investing in a distressed house for a financially secure decision. Although many real estate investors consider distressed house investments as a major investment strategy to earn impressive profits after reselling the property, however, the process of buying and consequent reselling a distressed house is complicated.
The best part about investing in a distressed house is that it is available for a discounted price. The reason being that either the seller or the organization owning the property would look for opportunities to sell the property as early as possible for urgent money requirements. In case the property is listed with the bank auction, the bank would want to clear its books of liability and collect the loan amount. All these reasons sum up the fact that distressed houses are available at a price much lower than the market price of the property. Needless to say, this brings the opportunities to avail the property at a lower price and sell it at a higher price after renovation and earn profits.
Distressed assets are often considered counter-cyclical investment vehicles that help in diversifying the market when it is unstable. However, the future returns can be accessed only through the investment made for the acquisition and the further investments in the renovation of the house, as they sum up to form the total investment on a distressed asset.
Moreover, the possible profit from a distressed investment depends on the property price, the renovation cost, the location, and undoubtedly on the property market. All these factors constitute and forecast the profit or loss of such investments. So, investing in a distressed asset is assuredly a good investment choice with the aforementioned factors playing a major role.
Opportunities and Obstacles of profiting from distressed asset investment
Just as every decision or investment has a set of pros and cons that govern and decide the future of the said investment or decision, similarly investing in a distressed asset comes with some lucrative opportunities and some obstacles in the path to earning profits.
● As already mentioned, the most impressive factor governing the accelerating sale of distressed assets is their “low price”. The discounted price of a distressed asset lures buyers and investors towards it.
● The distressed properties have great potential to perform highly and bring some valuable returns for investors. A Distressed Property in a good location can bring in a high selling price in house flipping.
● Distressed assets are known to bring a high ROI or return on investment. With discounted buying and selling at a high price, a good return is worth asking for, However, one should not forget about the extra costs included with the renovation and repairs.
● When the obstacles or challenges are referred to, one possible challenge can be a high renovation cost. Since distressed houses are the ones that have remained ignored for a long time without proper maintenance and necessary repairs, the repairing and renovation costs for house-flipping businesses can be comparatively high, which can add up to the total investment on the property.
● Just as a good location can bring in a good selling value and help the investors earn a lucrative profit, similarly a bad location or less ideal neighbourhood can make the investor struggle with prospective clients and a good offer.
● With the low-price investment and high potential returns, distressed properties are getting more popular among property investors and are growing to be a seriously competitive industry. Each distressed asset has many potential buyers and so the competition for investment is getting higher with the passing time.
Hopefully, this information is enough to guide you toward investment in the distressed asset. If this interests you, you can look for available distressed properties in your area through the Probate Sale listings or the foreclosure listings. Engage in the renovation of the property and put it up for reselling to earn good returns and profits. All the best.