Buying a home is a long-term financial commitment. You’ll spend years paying off the mortgage. You’ll need to have money to cover the repairs and maintenance. You’ll also pay for insurance, taxes, association dues, and more. Those are some of the costs that homeowners learn to manage. But if you’re ready for all that and can’t wait to get your first home, here’s what you need to know.
You Can Buy Distressed Properties
You won’t be the only buyer out there, though. You’ll be up against other Sacramento home buyers. If you don’t plan on using an agent, it may be hard to find great deals on real estate properties in the area. That’s where distressed properties come in. When you look for companies that manage or sell distressed properties, you have a chance to find homes that might fit your needs and budget. Not many people realize how great distressed properties are. There are often fewer buyers, so you have less competition to worry about.
Benefits of Distressed Properties
There are two primary benefits to buying distressed properties:
- Lower price. Distressed properties are sold below market value. That means you can find great deals if you’re patient and careful enough when you go over the properties on offer. If you succeed in finding a property that fits your needs and budget, you can get it with a significant discount.
- Future profits. Buy low and sell high is possible with distressed properties. If you buy a distressed property and fix it up, you have an excellent chance to get back all the money you spent—and more—on the property. That’s one way to earn profit off a distressed piece of real estate.
Risks of Distressed Properties
Buying distressed properties come with a few disadvantages, too, though. For instance:
- Serious repairs. Some of the properties you’ll find might require serious repair. But if you have the budget and time to fix it, it can be worth your while. You’ll need to invest your resources before you see any of the results. That means if you’re not in this for the long haul, or if you aren’t patient, this might not be right for you.
- Title issues. Some properties might have unpaid taxes, which can lead to title issues. Be sure to check on that before you buy a home. You might not want to deal with properties that have financial issues because of the unpaid taxes by the previous owner.
- Long wait. Some distressed properties can’t be sold right away. You might need to wait. The wait could be long in some cases, so be sure to ask about that. Knowing how long before you can move into the property and start remodeling the home is a must. That will determine your renovation schedule, too.
How Do You Buy Distressed Properties?
Look for companies that buy distressed properties. They can provide you with homes that fit the bill. They've already done the work by scouting out distressed properties for you, so you can pick and choose from the range of options they offer.