Being the owner of an abandoned house is definitely an interesting position. Most people look at the overgrown grass, dilapidated structures, and peeling paint of these homes and run the other way.
But, for some investors, a vacant property is prime real estate. With some negotiation, a little elbow grease, and some patience, this kind of property ownership can turn into the ultimate DIY investment.
What are the benefits of buying an abandoned house?
Because of the home’s status, local realtors often partner with banks to sell the property well below market price. Because of this, it’s very easy to secure a property for what most could consider a “great deal.”
When you purchase an abandoned property, you also get to deal directly with the bank. You don’t need to find the owner because there isn’t one. Investors often find working with banks preferable over homeowners because it can be completely a business transaction, as the bank has no emotional attachment to the home.
There is also a potential to sell the property for a great profit. This depends on the time you hold onto the property and the amount of money you have to invest into it for repairs.
What are the drawbacks of buying an abandoned house?
There could be many reasons that a house is abandoned. Perhaps the previous property owner could simply not make their mortgage payments and so the bank foreclosed on the home.
Or, perhaps the home fell well below the county’s standard for habitable properties and became condemned. If this is the case, there are certain things you need to be on the lookout for in order to avoid disaster.
Once used as a common insulation material, asbestos causes mesothelioma. Although it’s been illegal to use asbestos in new construction for years, older buildings are often still laced with the material. If you want to buy an abandoned property, be sure that there isn’t any present, or that you can afford to have it safely removed.
Abandoned homes have no one looking after them—it’s in their nature. Because of this, it’s important to check abandoned homes for structural damage, both major and minor.
You might need to just make a few minor tweaks. Or you may need to make some major repairs. You might need to demolish the home and just make use of the land. The point is, you need to know what your options are before you make an offer.
Bad Plumbing or Wiring
The plumbing and wiring of an abandoned house is another major concern. For the local government agencies to deem a building inhabitable, these are the first things that must be up to code. Faulty electrical wiring is also particularly dangerous, as it can lead to fires.
There is a potential that the amount of money that you need to invest into these repairs could be more than you are willing to pay, or are able to pay. This is why it is important to know what your intentions are for an abandoned property before you put in your offer.
What should you know about buying an abandoned house?
You need to go into each sale with a clear intention.
Are you purchasing this home to live in? Do you want to flip it for profit? Are you merely interested in its land because it is in a great location? Having a clear motivation for your purchase will help you significantly as you navigate the process because you will be aware of both your budget and commitment level to the project.
Your search to find abandoned houses “for sale” could be a bit more difficult than purchasing a traditional home. The best place to start is usually at the County Executive’s Office. They usually have paperwork for all abandoned properties in the area. They may even have a complete list of abandoned properties! So, even if the home that’s caught your eye isn’t available, you will have plenty of other options to choose from.
Even if the office doesn’t have a list of these kinds of homes, you still might be able to access a list of homes that need to pay their property taxes. The County Tax Office then sometimes has property auctions where you can make a bid on these homes. You can often get them for a very competitive price.
You can also find good listings on property listing sites. They will be at very low prices and have “must sell” somewhere in the description, typically.