As the real estate market recovers, it has become easier for homeowners to buy second homes. Some of these second homes will be vacation properties in attractive getaway areas and others will generate income. Depending on their goals, second home buyers are considering investment properties they intend to flip (buy cheap, refurbish and sell at a higher price), or properties they plan to lease to generate residual income.
You may love the ocean, but an oceanfront beach house might be out of the picture. Yeah, pretty expensive. If you look a mile or so from the shoreline you’ll still be close to the beach but you’ll probably find something more within your budget.
Let’s talk again about investment properties. Are you handy with a hammer? You might want to consider looking at dilapidated or abandoned properties. There are plenty of homes on the market that could use a little love.
For instance, properties owned by aging people who haven’t the strength or money to maintain their homes and grounds, sell for much less than their good condition value. They might be worthless in comparison to similar well-maintained properties in the area but because they require refurbishing, remodeling and/or repairing you can pick them up for much less. Put the work into these diamonds in the rough and make several thousands of dollars.
What is a tax-defaulted property? When property owners fail to pay taxes, their homes are said to be tax defaulted and are at risk of having the county seize the home to pay for delinquencies. Homeowners are given a period of time called the redemption period, in which to pay their taxes and fees and if they don’t, these homes are auctioned off to the highest bidder.
If you come across an abandoned home or one that has been vacant for a while, it’s a good bet the property is attached to a motivated seller. When a seller is motivated, it means they’re willing to negotiate a lower price for their home. They probably want to get this property off their hands—quickly.
Most of the assets of an inheritance stay within families. Mom and Dad or Grandpa and Grandma buy vacation properties, fishing cabins in the woods or other types of real estate that are then passed down from generation to generation. Families gather for holidays or share use of the homes during summer vacation. But there’s another way everyone can benefit.