Buying Distressed Properties: Perils and Possible Rewards

buying distressed properties

A distressed property is one that is being sold not by the owner(s) but by the lender. Often, though not always, the property has been foreclosed upon because the owner did not keep up on mortgage payments. Distressed properties can include any for which the purchaser had to take out a mortgage, including commercial property, single-family homes, or multi-unit residential properties. If you are interested in buying distressed properties, keep on reading!

Buying Distressed Properties: What To Look Out For

Buying a distressed property can be a risky endeavor involving some tedious extra steps. However, as investors such as Steven Taylor Landlord have discovered to their advantage, it can also involve rich rewards.

If you’re interested in buying a distressed property, you should have a clear idea of what you are getting into before you think about making a purchase. Here is a guide to the potential pros and cons.


Because it is important to have a realistic view of what buying a distressed property could mean for you, here are the potential disadvantages.

  1. High Maintenance

It is common to find a distressed home or apartment building in poor condition. Lenders have other concerns than the upkeep of the property, and sometimes the previous owner didn’t bother with it much either. The money you can save buying a distressed property may go right back into maintenance and upgrades, so keep this in mind when figuring out your budget. Hire professional contractors that specialize in furnace installation in Downriver Mi to make sure you get the best rates and a strong roof for your new real estate acquisition.

  1. Property Value

The property value of a distressed property may not be what you expect due to its location. It is common to find them in neighborhoods with generally lower income.

  1. Paperwork

Buying distressed properties can be a frustrating process because sales usually take longer than they would otherwise. There may be a second mortgage that causes issues, and often the lenders are preoccupied with other concerns.


If you can cope with the downsides, there are also potential benefits to buying a distressed property. You can usually make the purchase for a price well below market value. This is generally the case, for most properties. Therefore, you can buy a house and still have some money left for potential remodeling.

It is also generally the case that these distressed properties have some issues. Whether they need new windows or doors, or a new patio, it does not matter. Buyers usually have enough money left to refresh them. Once the property has been fixed up, it may increase in value, making it a good investment.

All in all, sometimes, the bad luck of one person is the good luck of another. Buying this type of property does have advantages and disadvantages. It all depends on the property and its location. If you want to buy a distressed property, consider the pros and cons and then make your decision. We hope this article has helped you learn what to look for and how to make the best choice!

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