Real estate investments can be a blessing or a curse, especially in today’s market. Buyers, sellers and investors are constantly weighing their options and planning strategies. Few people want to lose money on investments or pay more than necessary. After all the definition of investment is the act of contributing money in order to gain profit.
Numerous real estate investments exist. Investors can purchase physical properties or paper real estate notes. Properties can range from a tiny parcel of raw land to a multi-billion dollar resort that caters to the rich and famous.
Many individuals are opting to purchase distressed properties such as foreclosure, bank owned and short sale homes. These properties generally require elbow grease and hours of physical labor to return them to their original luster. Some people prefer the hands-on, do-it-yourself approach, while others hire contractors to perform necessary tasks.
Distressed properties can make exceptional real estate investments as long as buyers fully calculate the true costs. This is particularly true for DIY people because they rarely factor in the cost of their time. If the job becomes larger than anticipated and contractors must be brought in, the buyer is already losing money on their investment.
Foreclosure homes are oftentimes purchased for the purpose of house flipping. Rehabbing and flipping houses is not for the faint of heart. Very few auction properties are in perfect condition. Most are in need of serious repairs or total renovations. Weigh this real estate investment option carefully unless you are exceptionally skilled in home repairs or able to purchase the house significantly under market value.
A lesser known, but generally lucrative real estate investment is that of probate properties. Probate is the legal process used to sort out and finalize matters when a person dies. If the decedent executed a legal Will and beneficiaries are in agreement, probate typically lasts between six and nine months.
If the decedent died intestate (without a Will) or family disputes erupt, probate can drag on for years. During probate the decedent’s estate is responsible for paying outstanding debts. If the decedent owns real estate with a mortgage note, the estate must continue paying toward the loan or face losing the property to foreclosure.
Many probate homes are owned outright. Oftentimes, beneficiaries do not want to be saddled with the responsibility of maintaining the home throughout probate. In some instances, the estate cannot afford to pay utilities, homeowners insurance and property taxes.
Probate properties can be profitable gems, but locating them requires a bit of detective work. Last Will and Testaments must be filed through the probate court. These documents are public records and can be viewed by anyone who wishes to see them.
The last will contains information about the estate administrator and real estate holdings. By locating the property address, additional information can be discovered by reviewing property deeds and tax records.
If the estate is small and few assets exist, this is a sign the estate could be in financial straits. Contact the estate administrator to discuss the option of purchasing the property. Most people do not realize they can sell real estate held in probate. Estate administrators are oftentimes relieved to learn they can sell the house and relieve financial burdens from the estate.
These are but a few real estate investment opportunities. The Internet provides a wealth of information about the various types of investment properties, along with financing techniques and investing strategies.
Take time to become educated about the opportunities available. Start small and learn as much as you can. Doing so could allow you to own a private island, beach bungalow or penthouse condo where you can spend your golden years doing whatever you desire!