Wednesday, June 6, 2012

Rent a Foreclosed Home

No….I am not writing about renting your current house that is in foreclosure, I am happy to give you the run down on that, as I have heard owners staying in their home up to 3 years without rent.  But..that’s not what this post is about.  This is a blog about Buying HUD Homes, not living rent free or collecting rent from your foreclosed house.

Top 5 Benefits to Renting

1.   Free Repairs, the landlord foots the bill.
2.   Home prices keep falling Shillings (insert article) another 20% is anticipated.
3.   Stuck with loud smelly neighbors and a barking dog.
4.   Renting will always be cheaper than buying in higher end neighborhoods.
5.    The freedom to move whenever you want

I fundamentally agree with all of them.
However, if you don’t buy a house, and your going to rent, guess what?  The odds are the house you will be renting was a recent foreclosure.  

If your going to Rent a Foreclosure Why not buy one?

1.    You know you love home repair projects, even if you are all thumbs and it feels good to fix it yourself, watch your kids fix it and to be yelled at for not fixing it....well some people like it when their spouses yell at them.
2.    Once home values start going up so will your rent. Do I need to say more?
3.    If you own or rent, barking dogs and smelly neighbors suck.  Since we can’t shoot the dog or hose down the smelly kids next door, Check Out Your Neighbors, know who they, this is a must for renters or owners.
4.    If good schools or living in a high priced neighborhood is your primary goal and renting is the best option, there is no shame or loss in this decision. Do it, no guilt.
5.    This Is My Home! No permission needed to smoke, have a dog, put up a playground or design your own private dungeon for the loud neighbors…sorry I just couldn’t help myself.

Just Buy Smart

Watch the value trends in the neighborhood.  When you see a HUD home for sale.  Pay attention to the list date.  This gives you a good idea, how long the house has been on the market, this helps as you develop your bidding strategy, which I will write about in upcoming posts.

Try to get an idea of buying interest. High buying interest is good and bad.  It’s good to know you are looking at a property others are interested in.  It’s bad, because you have to pay more, because of the competition.  However when you buy a hud home with an FHA  loan, you will never have to pay more than the current appraised value.  

As a general rule, you can bid lower than asking price.  If the bid was not accepted, keep edging upward. The Asset Manager, will not counter back with a price, you just have to bid again the next day by 11:59pm  that same day.  If you are committed a buyer your HUD approved broker and are qualified for an FHA loan and have the $500-$1,000 deposit, your broker should be ok with submitting offers each day till the bid is awarded.  

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