Nov
The buying and selling of distressed homes is experiencing a boost in today’s real estate market due to its potential return of investment. This venture could be a potential source of substantial profits for Ohio real estate investors or potential buyers looking to move up in our market. Central Ohio has an abundant collection of distressed properties for sale and some of the best distressed homes in Central Ohio are private residences, which can be remodeled and renovated into beautiful homes. Home sales in central Ohio were up almost 17 percent in September, 2011 making three consecutive months of home sale increases. According to the Columbus Board of REALTORS®, 1,719 homes sold in September which is 16.6 percent more than the previous year’s 1,474 sales. In addition to the increase in sales, homes that were put in contract also increased by over 58 percent last month. Year-to-date home sales (January through September 2011) are still trailing 2010 by 3.7 percent. As the Central Ohio market continues to recover- it is a time to take advantage of the lower mortgage rates and the low housing prices. But everything has its downside along with benefits so let’s dig deeper into some of the pros and cons of this seemingly profitable venture.
PROS
The most enticing thing about a distressed house is that it is sold at a bargain price – way below market value price. Central Ohio has an abundance of bank owned homes and short sales. Fixing up a rundown house is a good way to convert to an investment property or to add to your portfolio. Once the house has been renovated and refurbished, it can be sold at a much higher price. Neighborhoods like Upper Arlington, Hilliard, Lewis Center and more have short sales ready for the new owner.
CONS
Getting a mortgage for a distressed house in need of renovation can be tricky. Most mortgage lenders won’t lend money to buy houses in need of a lot of restoration, renovation, and refurbishment; however there are fix up FHA type loans. Do your homework and investigate your options. Remember if bidding on a short sale, the process will take months. Homes are sold “as is”. Restoring a distressed house can be hard to endure. It will entail a lot of dirty work and take so much of your time, patience, and resources. Restoring a rundown house can also be costly. You must come up with an accurate estimate of the costs. Cost of renovation and refurbishing will always be higher than you expected. Whenever you start to renovate- there are always surprises that come up. You must also take into account the fees and taxes included in the purchase and the time you will have in renovating the home. It’s hard to sell an old renovated property at a higher price than average market price, regardless of the amount you have spent on it. Make sure that you have accurately calculated everything so you can still price the house for a substantial profit.
TIPS
If you have exhausted all necessary considerations and you are convinced that buying a distressed house is right for you, then your first challenging task is to look for the right property. Drive around residential streets of the area you would like target for your project. Then seek help from local Realtors® who would be more than willing to assist you in finding the right distressed property for you. If buying a short sale or foreclosure is what you would like to do, please check with your Realtor® to make sure they are experienced in placing offers on HUD, short sale and REO homes. Happy House hunting!
Debbie Harr is an accomplished and award-winning Ohio Realtor®. She is a recipient of Ohio Association of Realtor President Award and Board of Realtor $25 Million Dollar Award. She has been named top percentage earner among all agents in the Columbus MLS area for actual homes sold. She is the Manager of http://www.homesthatclick.com. Homes that Click Realtor’soffer discounted and flexible fees for full brokerage service and marketing for sellers and buyers. Recognized by Business First as one of the Top 25 Residential Real Estate companies in Central Ohio for more than 6 years for actual homes sold, they are a top performer among more than 400 brokerages.
