Abandoned houses are houses that are no longer used or occupied. People may move out of the property for several reasons, leaving it in a run-down condition. Since they are not well-maintained, abandoned houses are usually cheaper. This makes them suitable for those looking to invest in real estate or buy a new home to stay in. But when buying an abandoned property, one must conduct thorough research and not rush the process.
About abandoned houses
People often get confused about what abandoned houses or properties are. Owing to the term and the nature of the property, it is easy to mistake a vacant property for an abandoned one. Vacant houses are the ones that have been left behind by the residents and are unattended but are still in the ownership of the original owner. Abandoned houses, on the other hand, have not only been left behind, but even their ownership has been forfeited by the owner. Properties may be legally abandoned for several reasons, such as financial issues or foreclosure. Usually, the ownership of such houses gets transferred to the state or the lender (in case of foreclosure).
Benefits of buying an abandoned house
Considering an abandoned property has several benefits.
Low cost
While one cannot get abandoned houses for free, they are usually cheaper owing to their legal condition. Those properties that have been unattended for a long time and are in really bad condition could have an even lower selling price. This is because the lenders or the state would be eager to get rid of the house as soon as possible.
Lack of competition
Since abandoned houses are not the first choice for traditional homebuyers, there is a lack of competition in the market. The difficulty of owning and repairing an abandoned house generally drives a lot of people away. Plus, the availability of the houses is not widely marketed, which further reduces the number of customers.
Increased scope for customization
Those interested in customizing or designing a house in their own way can benefit from buying an abandoned house. Since these houses need repairs and renovations anyway, customizing them along the way becomes easier. Also, the money one saved on the price of the house can be invested into customization.
Opportunity to earn a profit
Abandoned houses are a great opportunity for flippers or individuals looking to earn a profit. Flipping houses involves buying a property in need of repairs at significantly lower prices, renovating them, and selling them for a huge profit.
Challenges with abandoned properties
While an abandoned house has several advantages, one must consider a few things before buying it.
Cost of repairs
The purchasing price of an abandoned house is low, but the cost of renovating it might be substantial. So, before proceeding, one must get an estimate of the repairs needed. Doing so would give one an idea of how much they have to spend.
Hidden costs
Besides repairs, abandoned houses may have hidden costs, such as unpaid taxes. One must account for these expenses when purchasing the property.
Challenges in financing
Financing an abandoned house may be difficult. Lenders usually avoid offering a loan for a property with legal and structural drawbacks.
Legal challenges
Buying an abandoned house may involve a lot of legal back-and-forths, given its ownership situation.
Time investment
Buying and owning an abandoned house will require a lot of time owing to legal issues or renovations.
Process of buying an abandoned house
Going about the process in a step-by-step manner makes things easier.
Find an abandoned property
If someone has found an abandoned house, they have already cleared the first step in the process. Individuals who have not yet found such a property but do plan on purchasing one will have to put in some effort. One can begin by roaming around the neighborhood and inquiring about properties that may seem vacant or abandoned. The individual can also consult a realtor and ask them about abandoned houses. Another simple way to find an abandoned house for sale is by looking online for listings and auctions.
Find the owner
If the ownership of an abandoned house has been transferred to a bank or the state, one may be relieved from this step. But if the property still legally belongs to its original owner, one may have to find the individual. One can simply start checking the house’s records, which would be available at the country clerk’s office. Upon finding the owner’s name, one can try to search for them online. Upon locating the owner, one would need to contact them, conveying their interest in buying the house.
Conduct a home inspection
An abandoned house, especially one that has been on the market for a long time, would need repairs and renovation. So, before purchasing it, the prospective buyer must get the property inspected by a professional home inspector. An inspection will help one gauge the true extent of damage and the amount of repairs needed. It can also reveal if the house has any environmental threats, such as mold or asbestos. After the inspection, if one deems the house worth buying, one can close the deal.