If you’ve noticed some vacant properties in your area, you may have wondered whether purchasing them could be a good real estate investment. Investing in vacant property is slightly different from buying a currently-occupied home or a typical commercial property, so it’s best to research this process carefully before making an offer. To help prepare you for the process, here’s a complete guide to what you should know before pursuing vacant investment property.
What is a Vacant Property?
Before you search for vacant property, you’ll want to understand what is considered vacant. In general, a property may be labeled vacant or abandoned if no current resident is living in it. Properties can become vacant for any number of reasons. In some instances, the home may have been foreclosed on due to unpaid mortgage payments or property taxes. In other cases, the owner may have abandoned the property or passed away. All of these scenarios may lead to a property becoming vacant.
Why Should You Invest?
If you’re already curious about investing in a vacant property, you may have already established several reasons for pursuing this investment. However, there are several perks to investing in this type of property that you may not have considered. Although vacant properties may sometimes require more repair than new or inhabited homes, they do have some unique advantages. Some benefits of investing in vacant property include:
- Fixing and flipping the home
- Turning the property into a rental
- Obtaining property in a valuable location below market price
How Do You Find a Vacant Property?
If you’re searching for a vacant property, it may take a little more sleuthing than opening a real estate app and browsing active listings. Thankfully, a few methods can help you narrow down your pool of options and identify potential property. Try one or more of the following methods to find prospective vacant real estate in your desired area:
- Contact local banks to ask about recently foreclosed properties
- Browse real estate listings in inventory archives
- Drive through local neighborhoods and look for vacant homes
- Call the local police department to ask about records of vacant properties in the area
How Do You Find Vacant Property Owners?
If you prefer a more personal approach to making real estate offers, you may want to search for vacant properties whose owners are known but no longer living at their properties. For instance, homes that have not been foreclosed on but whose owners chose to reside elsewhere may be ripe for making offers directly to the owners.
Ask around about these types of properties to see whether there are any in your area. By talking with an owner, either virtually or face to face, you may be able to make a compelling case and reach a deal for less than the property’s current value.
Before buying a vacant property, it’s best to be prepared with some key facts. As you embark on the search process, remember these key takeaways:
- Weigh the pros and cons of investing in a vacant property
- Explore different avenues to identify vacant properties you could potentially purchase
- Research the typical maintenance issues that may come with a vacant home
- When possible, contact owners directly to discuss your offer
If you’ve been considering a vacant investment property, it’s important to understand the upsides, the potential pitfalls, and the typical purchasing process you can expect. With this complete guide, you’ll be informed and well-prepared to identify good vacant property investments.