At times, when investors are searching for the best deals that have been overlooked by others, they often come across properties that have been damaged by fire or water. As you may have suspected, the greater the damage the greater the profits will be.
The key as an investor in the real estate market is to purchase the property for a very low price, fix it up and sell it at a higher price for a substantial profit. When you are interested in purchasing properties for less money, you need to also consider properties with visible damages or evidence of age and wear as well as fire-distressed properties.
The Benefits of Investing in Damaged Properties
Properties that have been damaged by fire are not on the top of the list for investors who are not familiar with working with this type of property. Therefore, the competition is minimal.
For properties that have light smoke damage, you will have to take care of the cleanup, debris removal and replacing obviously damaged areas of the property like broken windows. Ask around to determine the cause of the fire. If the fire was caused by something electrical, then you will need to take care of the necessary rewiring. For older properties especially, you will need to replace panels and smoke alarms.
Hiring a public adjuster will make a difference when investing in fire-distressed properties. He or she will be able to ensure that you get the most from the negotiations with the insurance company. The adjuster will provide a detailed estimate, usually by using the same software that the insurance companies use. A real difference can be made in the details by an experienced adjuster.
At first, you may think that investing in fire-distressed properties is more trouble than it is worth. However, it is important to keep in mind that the majority of the repairs will be paid for by the insurance company.
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Tags: fire distressed properties, investing in distressed properties, Investor, Property, real estate market
{ 2 comments… read them below or add one }
Hi Sean,
I have often wondered about investing in fire distressed properties. I didn’t realise that the insurance company would pay for most of the repairs; assuming that the house was covered by insurance.
I can see that hiring a public adjuster is a great idea and I think you’d need to get the professionals in to make the repairs. This is one time you’d definitely want the wiring checked.
Great ideas here Sean! A fire damaged property in a great location would be just the meal ticket.