Cheap foreclosed homes are the best option if you are looking for a long term investment. There are many reasons they are not a short term investment today but renting is an amazing opportunity that you should consider.
There are so many foreclosures on the market today. It is saturated. This only means that it is currently a landlord’s market today. There are so many people that have lost their home to foreclosure that need a place to live. Obviously, they cannot go buy another house because of their financial situation. This means they are out looking for a rental. There are fewer rentals on the market than there are people who have a place to live. You can rent out low cost houses all day long and make a big profit.
Rentals are definitely long term investments. When you purchase a low priced home that has defaulted you can get it for half the price. You can charge a rent that is twice as much as the monthly mortgage payment and immediately begin making your money back that you paid to purchase the property. Plus, you will be able to put plenty of money aside when your house doesn’t have a renter in it. This will allow you to have a cushion too.
Because rentals are long term investments you have to be prepared for it to take time to get the money you have invested into the house back. Cheap foreclosed homes can be purchased at half the market value sometimes but you have to have patience. You may find that in ten years the market picks up and if you sell then you could make as much as a 400% profit on the investment also. You cannot purchase foreclosures and think that you will put them back on the market for sale immediately and make any money. The only way to make a profit is to sit back and let a renter make the monthly payments on the mortgage while you wait for the market to pick back up. You will have major equity in the house and eventually you will make a very large profit. Right now is definitely the time to buy.