Why Foreclosed Homes are Always a Worthy Investment

The rate of residential foreclosures has been consistently dropping in the past decade. And yet, there remains hundreds of thousands of foreclosed homes available in the real estate market. Many of these properties are attractive to investors due to their low selling price.

If you’re haven’t considered investing in them yet, here are reasons that may convince you to change your mind:

Foreclosure investing

1. Getting additional income by converting it into a rental home

There is the obvious financial prospect when renting out a converted foreclosed home. It is, after all, an efficient way to make good money out of your investment. Of course, it’s not usually a smooth ride from the beginning. It would take time and money to renovate the house before you can put it on the market. But once you get your first return on investment (ROI), you will find it to be a great way to receive passive income on a regular basis.

Remember that when setting up your property as a rental, you also help someone find a living space. According to a research conducted by the Zillow Group Report, it takes renters more than 10 weeks to find a new home. Providing an additional housing option out of a formerly vacant property is beneficial to everyone. Sometimes, the house is even rented by the former homeowners, making the transferring process smoother for all parties.

2. Increasing the community security

An investor will help reduce the security risk in the neighborhood by purchasing and rehabilitating a foreclosed home. With no one living in it, a foreclosure can become a hotbed for both criminal activity and animal infestation. Looting and vandalism are common in vacant houses. Though these acts are sometimes conducted by the former homeowner out of frustration and desperation, outsiders are also prone to doing them.

Looting and vandalism can place the community in a precarious situation. Fixing up a foreclosed home will put everyone at ease. This is because it ensures that there will be tenants to maintain the property, driving out criminals and illegal occupants from the area.

Home security

3. Securing the community’s property values

Along with the safety issues mentioned above, the presence of a vacant foreclosed house threatens the financial stability of the community. The sight of a boarded-up house does not help anyone. In fact, the real estate value of the surrounding properties goes down in a domino effect.

After a house falls into foreclosure, the previous owner will likely fall behind on property tax payment. Moreover, considering the possible rise in criminal activities in an area with a foreclosed home, resources might suffer. By investing in a foreclosed property and following the law, one already participates in making the community a more financially and physically secure place.


A house lost to foreclosure is not a lost cause when there are investors ready to give them a second chance. Though many investors are concerned with the financial gains of a foreclosure, you can be sure that the risk in investing in one will pay off in the end. You will help make American neighborhoods safer and more financially secure.