Ever sit down with a real estate agent when looking at potential properties to buy? They show you all kinds of fancy graphs and charts to convince you of the hottest areas to invest in. They’ll probably tell you that foreclosure rates are settling into a more normalized pattern across the country, so opportunities to buy foreclosed homes and flip them are becoming less plentiful. Let’s understand this from an agent’s perspective: fewer properties on the market means higher prices—and, higher agent commissions. Smart investors don’t want to pay that, right? It’s important to develop your own understanding of the market beyond price trends and turnover rates—you also need to consider relevant local government and financial policies so you can achieve the best possible return on investment. When you look at the big picture, opportunities for buying and renovating foreclosed homes are readily available. And, you can sell for solid ROI them more easily if you renovate with families in mind.
Queens Rich With Favorable Investment Property Potential
In New York, where the lengthy judicial process has clogged up the availability of foreclosures for three or more years, banks are just recently offering up their crisis-driven backlog of properties. Queens, in particular, shows promise for investors to transform these newly available properties into family homes that can boost your bottom line.
Here’s the nitty-gritty. The combination of distressed homeowners who are still unable to negotiate manageable terms with their lenders and the December 2016 termination of the federal Home Affordable Mortgage Program (HAMP), which offered income-based modifications with rates as low as 2 percent, created a limited inventory of affordable investment properties. But, with courts now streamlining the resolution of foreclosure cases, the stock of low-investment properties in Queens has nearly doubled from last year—creating favorable investment opportunities for investors who know how to navigate the challenging system.
Since the floodgate of homes in deferred financial distress have opened, investors can purchase a neglected home at deeply discounted prices for rehabbing then selling at a rising market value in an area that is gaining significant value and attracting families. With families being priced out of NYC and the real estate boom spilling over from nearby Brooklyn, the average home sales price in Queens has jumped by 10.8% between 2015 and 2016. And, it’s no wonder: Queens benefits from excellent public schools, great access to NYC’s transport system, and an ethnically diverse community—even for New York.
Renovating with Families in Mind
Due to New York’s lengthy foreclosure process, many foreclosed properties in Queens may have been vacant for months or even years—and they will need a serious makeover by an experienced investor. But, the most astute investor will do more than just the necessary repairs. They will target renovations toward a growing target market of families.
Whether you plan to rehab a multi-family building, a condo, or a single-family home, keep in mind that most home-buying families these days prefer more amenities over sheer square footage. Here are some of the features that top their list:
- Energy efficiency. While most home buyers do not expect solar or geothermal energy (which is often out of their price range), families across all income levels do look for long-term cost savings through Energy Star-rated appliances, low-E windows, and programmable thermostats. It’s good for the environment and their pocketbooks.
- Outdoor space. Families desire some kind of relaxing outdoor space such as a deck, garden area, patio, or fenced yard. That’s why most home buyers look forward to moving to attractive and affordable suburbs—like Queens.
- Separate laundry room. Home buyers are still leery from the recent economic downturn. So, rather than hanging their hopes and dreams on master suites or fancy finishes, they simply want to spare themselves the time and money spent at a laundromat.
By renovating according to these key market trends, investors can save money on installing unnecessary features during the rehab process. Not only can the property be resold at the rising market value, but it also holds the potential to realize longer-term revenue as a rental.
HomeVestors can Help You Find the Perfect Property
The hardest thing about buying and renovating foreclosed homes is deciding which properties offer the best return on investment. Through crisis, HomeVestors® franchisees continue to thrive while other independent investors have experienced significant financial loss. The difference? HomeVestors® franchisees learn how to leverage their investment know-how to purchase undervalued properties in prime recovery areas like Queens to help turn a profit. With the proprietary software, ValueChek™, franchisees can take the guesswork out of assessing homes for purchase and renovation. Speak to a member of our team to find out more about becoming an independently owned and operated HomeVestors® franchisee.
Each franchise office is independently owned and operated.