Buying properties in area with high foreclosure (yes/no)?
Hello-
Note: This is part of my learning about new things so I'll keep some homes on the shelf, so to speak, just to see what happens with them. Ie. Listed at, sold at, how long on market.
Here goes....
Looking in an area not realizing that there are several foreclosures. I inquired about a home that the seller is selling (his mother lived there and passed away) who did quite a bit of fixing up such as new roof, kitchen, some flooring, painting, it actually looks good. Counter tops aren't granite and the appliances are all new. There doesn't look to be much that would need to be done. Landscaping is above par compared to some of the neighbors.
It's not sold since it was put on the market in May and has already dropped $5k. I've checked the comps and one home is higher and went on earlier - that seller is probably just leaving it as is without thinking on the area. Anyway, this guy dropped his price to what he countered with on one offer.
The home's neighbors and street all have properties that are in good shape and well kept.
When I inquired about the home as a rental, it was suggested it might not be good because the area has a high rate of foreclosures. I looked up the area on foreclosures and did find quite a bit.
Does that really affect home values? Won't they eventually be purchased, fixed up, sold or rented, or just lived in by the owner? This question to myself I thought well yes, it may take some time not knowing how long the other properties have been in foreclosure and there is the possibility of others going into foreclosure as well.
It's an area that does rent, I think it's a higher student rental.
What is your take on this for those well experienced in the business of foreclosure? I suspect that a lot of investors buy them and flip them but it could be there are just as many that buy and keep them in their portfolio.
Thank you....