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Foreclosure Buyers: New Landlords
By jason | May 21, 2008
The enduring crisis in the housing market has not only resulted to millions of foreclosed homes nationwide. As a way to minimize the negative effects of high foreclosures rate, lending standards have also tightened.
Because of these reasons, it is not surprising that individuals and families are choosing to rent instead of buy homes. This particular situation is very appealing for many buyers and investors.
For a relatively lower capital, real estate investors can actually purchase foreclosure homes and treat them as fixer uppers. After repairing and renovating these properties, they can now enjoy a steady source of income. Of course, buyers will probably have to act as landlords.
With the rising cost of living and increasing fuel prices, it will surely be a challenging role to play. According to experts, it will be best if buyers/landlords follow these tips:
- Do Background Checks: it would certainly be wise to conduct a credit and background check on the person that will be renting the property. Some landlords contact credit-check agencies in order to find out about the person’s credit history, eviction records and even criminal records. This way, the landlord can avoid inconveniences. These credit checks are not even expensive especially since most of the information can be obtained from public records.
- Formulate Rental Guidelines: it is very important to lay out the ground rules for tenants. These guidelines should be understood and accepted by the tenant before signing the lease contract. Landlords will be able to justify their decision to evict if the tenant failed to follow these guidelines.
- Be Matter of Fact: when it comes to the eviction stage, landlords should always be objective. In most cases, rent missed for 45 days is enough reason to give an eviction notice. This is because tenants will usually have an even more difficult time paying for rent that is 60 days past due. In order to avoid this, landlords/buyers can always charge a considerable deposit form the start as a security measure.
These tips will help foreclosure buyers who have become landlords manage these foreclosed homes. As always, open communication is the most important key to a lasting business relationship.
Topics: Foreclosed Homes, Foreclosure |