To make a profit in this industry, you have to buy low and sell (or rent) high. But with home prices constantly on the rise, that’s getting harder and harder to do in most parts of the country.
Fortunately, the open market isn’t your only resource when looking for potential investment properties.
Here are five other property types you might consider if you want to strike a deal:
Foreclosures: Foreclosed properties can be great options, especially if you’re looking for fix-and-flip material. Just be careful about where you buy, and get an agent’s and contractor’s opinion before moving forward. You want to be sure there are no serious problems with the home and that a high market value is expected on the back-end. Be sure to use our foreclosure search tool foreclosure search tool to learn all about a property and its history, too. The more you know, the better.
REOs and bank-owned properties: Bank-owned homes and REO properties can also be a solid choice. Lenders are usually eager to offload them (meaning low prices!), and they’re typically in better condition than traditional foreclosures are, too. Check out our REO search tool for bank-owned homes near you.
Short sales: Short sales are an option for homeowners if they’re in pre-foreclosure, or there are liens against the house and they need a quick out. Though these homes often come at bargain-basement prices, they’re not always in the best condition and can come with serious red tape, so make sure you’re well-informed before you make any moves.
Government-owned properties: HUD, the VA, the IRS, the FDIC, and even the USDA all own a slew of seized and foreclosed-on properties to their names, and you can usually get them for a steal, too. Try HUDHomeStore.com, VRMCO.com, the Treasury’s General Property Auction site, or the FDIC’s list of owned properties to get started.
FSBOs: Finally, for sale by owner properties can sometimes be a smart move — especially if the home’s been on the market a while. A nice bonus here is that you can negotiate with the seller directly instead of dealing with an agency, bank, or agent.
You can also look to real estate auctions, sheriff’s sales, and wholesalers for great deals, and of course, our search tools can help you find thousands of low-cost, high-potential properties in your area. Just check our state-by-state listings here.