What does the term probate mean?
Probate is a term used for a legal process. Under this, a deceased person’s estate is managed. While probate properties are generally real estate assets that are part of a larger estate, they sometimes need to be sold off to pay the deceased person’s debts. It can also be sold off if the deceased died without a proper will designating who gets what.
The pros and cons of investing in probate assets
There are probably tons of ways in which you may go scouting for potential profitable real estate properties, but there remains one under-utilized route that is often considered a major moneymaker for investment business and yet not so frequently used! Clearly, buying a probate property is a unique way of building one’s real estate portfolio, but there’s always a catch. Let’s find out!
- With the tax and cost of maintenance, the executor may wish to sell the property quickly. In such a scenario, you can always strike a good bargain.
- Most investors tend to avoid the prospect of lengthy court proceedings, and thus there is less demand for such properties. This makes the investment more profitable.
- The advantage of investing in probate properties is the potential for a notable profit upon reselling.
- Probate homes aren’t required to disclose anything, and thus, you could well be laying hands on a property that requires extensive repairs.
- Not every home in probate is sold at a discount. Thus, the initial investment may sometimes be more than the actual resale value of the property.
- The geographical location of the property isn’t too ideal for potential buyers.
- Such a property is unlikely to go through probate court very promptly.
- The sale can get further complicated by the possibility of debt being attached.
Why the pros outweigh the cons?
You’ve probably always known how the real estate scene has long been the playground for the wealthy and the well-connected, and it’s quite the same even in the present times. In fact, most of the negative aspects surrounding the sale of probate homes and distressed properties can be offset by getting an inspection done before investing any money. This would help you in finding out about things that could potentially hurt the resale value in the long run. However, the fact that probate properties are sold as-is (in their current form), good investors see it as an opportunity of buying cheap, renovating little, and selling it at a premium. That is not all! Most such properties don’t have a lien and the properties often sell for below the market value. They are also off the market, and thus do not attract the attention of the masses.
What do we recommend?
Should you take a chance on probate homes? Well, while it is all up to you, there’s no denying the fact that such properties are great for real estate investors looking to make a quick profit. Probate homes don’t have a lot of downsides if you aren’t too concerned about the moral issue of owning such a property. However, we do care about the tips we receive and that’s why we only recommend Foreclosures Daily. The property sales platform is designed exclusively for probate solicitors and offers genuine info about distressed and probate homes. It lists only the best properties. Feel free to get in touch with them for genuine off-market leads.