Property Investment Strategy: Distress to Success
What is a Distressed Property?
As the name suggests, distressed properties are usually in a dilapidated state, requiring repairs and renovation. These types of properties may also have had construction halted midway due to the owner running out of financing and therefore unable to complete the project.
The most attractive thing about distressed property is that such houses are usually sold at a much lower price than the actual property valuation. Property owners of distressed properties are more open to negotiating a lower price because of the amount of renovation and repair work needed to bring this property back to life making them an ideal property investment.
3 Reasons why you should buy a distressed property
Low and Affordable Prices
Due to the nature of distressed properties, it is quite easy to purchase a house below market value. Homeowners are usually in a position to be open to negotiations. This places you in a better bargaining position to get yourself a great offer.
Distressed properties create opportunities for investors to make a profit. Whether you decide to buy to rent or sell, because the prices are below market value, your margins are a lot better. Purchasing a distressed property instantly puts you in a position of great financial gain because you have bought a property for lower than its potential market value. After renovation the value of your property will increase.
While most home buyers will focus on a property’s current state, investors have the privilege of seeing its future potential. While some may look at a distressed property and see it as being poorly maintained and something, they think they must avoid. Investors can see huge growth potential and a future market value making them an ideal starting point in your property investment career.
Purchasing a distressed property and then doing a flip on it is a fantastic process. They are the most cost-effective option for a flip project and can be often a blank canvas to be turning into remarkable properties.
How Do I Find Distressed Properties?
Property investment can be a tough game, fortunately distressed properties are all around us. Once lockdown is over with, we would recommend you go for a drive around and look out for properties which look extremely run down and tired. Once, you start paying attention to these properties whilst out and about with your everyday life you will notice just how many of there are of them!
Distressed properties can be purchased from the following;
- Estate Agents
- Direct to Vendor
- Sourcing Agents
We hope that you have found this blog on Distressed Properties useful and as always stay safe.