Investing Tax Free

Investing in Foreclosed Homes

About investing in foreclosed homes

Buying foreclosed homes to improve upon has been a hot trend in real estate investment. There are now thousands of books and even websites dedicated to finding such foreclosed homes for you to buy at foreclosure auctions or Trustee's sales.

Unfortunately, the mother load of auctions, the US Government foreclosed homes auctions, charges a membership fee for you to even attend. Of course you can see what you'd be bidding on ahead of time on various websites.

Since only few people ever attend and even fewer actually buy these foreclosed homes, not all are even sold, and they do start at ridiculously low prices. Naturally this inspires all three types of real estate investors to buy low and fix up. Investing in foreclosure homes is most popularly with type 1 real estate investors, of course.

However, as time marches on, this hot trend is losing its advantage almost rapidly. Nowadays, it might not even be worth your time to attend a foreclosure auction, unless you've got a large bankroll and can buy in bulk. Eventually, only the type 3 real estate investors will be in attendance.

Real estate investing vs other types of investing

The Verdict? real estate investing is for those who want more hands-on control than they have with stocks, much more return on their dollar than they would with bonds, and have more time to spend on their investment than both of them. Chances are, one real estate investing type above is much better suited for you than the other two types, however you would be negligent not to weigh it against other investments such as stock funds when considering your ideal investment.

In any type of investing, no matter if it's real estate investing, investing in the stock market, or investing tax free, people are effectively looking for three main things:

  • Income from the investments
  • Tax deductions
  • Growth or capital appreciation

What makes real estate investing special, at least the first two types, is that you can have all of the three benefits above without having to invest a lot of money to get started. Add that to the added control you have over your own property, and it's easy to see why this is still the world's most popular investment.