Your budget may dictate whether you should rent or buy a distressed property. The savings of a distressed home may be offset by costly repairs.
If you are trying to decide whether you should rent or buy distressed property, the first thing that you should look at is your budget. If you have access to a significant chunk of money either in cash or through a loan, you can probably afford to buy a distressed property. Most of these properties are sold as-is and usually cost significantly less than similar homes in the same area.
However, most of these properties cost less because they need a lot of work. Ideally, you should be willing to invest a lot of time or money into these properties. If you don't have enough money to pay for repairs or have the skills to do the repairs yourself, you may struggle to reclaim your original investment. Once you have completed the repairs and adequately cleaned the property, you can try to sell it for a profit or rent the newly renovated property.
If you are considering a foreclosed property, it is safer to buy from a lender or the U. S. Department of Housing and Urban Development (HUD) than from an auction because you have an opportunity to pay for a home inspection before you buy from a lender or HUD. With a home inspection, you should be able to estimate how much money it will take to make needed repairs.
Since the real estate bubble burst, roughly four million families have become renters. The influx of extra renters into the rental market has increased the average rental cost in most areas. Some experts predict that rental costs will increase by an additional 4 percent over the next year. This makes owning rental properties financially attractive for anyone who is trying to decide whether to rent or buy distressed property.
Buying a distressed property can be a great way to get into your first home or get an investment property. Weigh the cost savings with the estimated cost of needed repairs to ensure you are getting a deal. A real estate agent can help you sort real estate that presents a good opportunity from homes that are a poor investment. Many agents also specialize in foreclosed homes and short sales. If you need a real estate agent, go to RealtyNow to find a professional in your area.