If you are ready to purchase your first rental property and you aren't sure where to find the best deal on the property that you need, there are a couple of great options to consider. You may want to look at homes that are listed as a foreclosure or a bankruptcy, or at homes that are being listed at a local auction. Most of the time you are going to get these properties as is when you make an offer, so you want to know what condition the property is in before you buy. Here are a few things you'll want to consider.
Bankruptcy or Foreclosure
A property that is going through the foreclosure process and is already owned by the bank, or a home where the owner has filed for bankruptcy will be the property of the bank that held the mortgage. The banks that have these properties want to unload the houses quickly so they don't get stuck with the extra inventory, and they often will sell the house for what is owed. This is a great way to get a low price on a house, especially if the owner had paid down a lot of principal on the mortgage.
When there is a house in an estate that can't be settled, or a house that can't be settled in a divorce, and it's paid off or there isn't a lot owed, it can get auctioned off. Going to a property auction to look at a potential property, and to possibly bid on it, is a great way to get a house for a fraction of the value. Some auctions will have specific requirements for all potential buyers before the auction takes place, so you'll want to call the auction company in advance to find out if you need proof of funds, a pre-approval letter or more.
If you are paying cash for either of these properties you want to make sure that you include that in your offer, since the bank or auction company will prefer this. The deal is less likely to fall through if you don't have to wait for financing or an inspection, and they don't have to worry that you can't get approved for the full amount that you need. Either of these options is going to be a great way to get a rental property at an affordable price, but the property may need some work.
For more information, contact a company like Bob Parks Auction Company LLC.