Foreclosed properties are those that have been taken over by the lender as a result of the owner’s failure to make payments. Renovated foreclosures can be a great source of income, especially if you intend to sell or rent them out. Investing in real estate is a great option for your long-term goals.
But like any real estate investment, foreclosed properties still don’t come cheap, and you want to get the most out of your money. So before you start digging into the list of foreclosed properties, be informed and do the necessary research. In this article, we listed the top 5 top things you need to keep in mind when you’re investing in foreclosed properties in the Philippines.
1. Be wary of additional costs
While foreclosed properties cost less than buying private properties, they can also entail additional costs. In addition to the resale price, you should look into any association fees, real property taxes, property transfer taxes, documentary taxes, and more. The condition of the property could also mean more expenses. If the property has been abandoned, renovation and big structural improvements could also cost more.
2. Consider the location
The location of the property is always an added asset. Look for foreclosed properties near schools or where there’s heavy pedestrian traffic. These are great places to turn your property into a bed space, apartment unit, or any kind of business. Also, check if the location is prone to floods and other calamities, or if the neighborhood is safe.
3. Buy at the right time
The real estate industry also has its low and peak times, so it’s important to know when those are. For instance, many good properties are on foreclosure orders after the pandemic, so you might get a good deal.
4. Seek help from an accredited real estate agent or broker
Buying foreclosure properties isn’t the same as buying private properties. You need to purchase them from banks, lending institutions, or government agencies. The process can be difficult and complicated if it’s your first time. Hiring a professional to assist you will help save time and effort and help you get the best deals for your budget. Brokers and real estate agents could also help you reduce the risk of having property problems.
5. Prepare your finances
Once you’ve already found the property of your choice, prepare your financing options. If you have enough savings, it’ll be easy. But if you’re considering other payment terms, take the time to study as well. Inquire about possible payment options such as rent-to-own, PAG-IBIG funding, in-house, or bank financing.
These are just some of the things you need to study before investing in foreclosed properties. Remember to not be in a rush and take the time to learn as much as you can. Good luck!
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