Thread: foreclosed homes for rent?

I was walking around my parents neighborhood which is a nice neighborhood homes in the 300 - 600K range and I noticed about 7 homes that were forclosed. The grass had not been cut in what looked like forever and hurricane shutters were on every house. I have no doubt that the mold growing inside the homes is horrible and that the pools are even worse.

That being said not a single one of them even had a forsale sign on them! My dad said that they have been that way for as long as 6 months.

My question is I know you can buy these homes on the cheap but with the current condition we are all in who the hell can actually afford to buy a home? Why are there not companies out there with contracts on these homes from the banks to rent them out on the cheap? DO the banks not care about getting some money per month on the homes? would the bank rather the house sit for a year or more and then sold at a huge loss because the house is now destroyed?

I have looked around and I cant find anywhere that rents foreclosed homes or any way to even see if banks will allow you to do that......... It could be a great business.

its to much work and liability for the bank to rent it out, it is eaier for them to just try and sell them for what they aer owed or just hold onto them.

There are companies in So-Cal who do just what you are talking about... Was a huge article in Money magazine about a year ago... Family was bouncing from home to home every Six months or so... There current home was a 1.5mil house that was stunning, they paid a lil over 1800 a month

Problem with that is once you allow someone to live there, its damn near impossible to get them out. The bank will have a tougher time selling the property to someone who wants to buy it as a primary residence if the buyer has to deal with getting the renters out.

Originally Posted by Andy6789

its to much work and liability for the bank to rent it out, it is eaier for them to just try and sell them for what they aer owed or just hold onto them.

Here is the problem.............. they are owed twice as much as the house is worth!

Originally Posted by MrJanko

There are companies in So-Cal who do just what you are talking about... Was a huge article in Money magazine about a year ago... Family was bouncing from home to home every Six months or so... There current home was a 1.5mil house that was stunning, they paid a lil over 1800 a month

Anyway to track down that article?

Most banks aren't equiped to handle retals of their foclosed property. They just don't have the staffing or knowledge. They should contract out for this but they don't. They even evict existing paying tenants as part of forclosue against the owner. It doesn't make sense but it's hard for them to deviate from their standard procedure.

Here is the problem.............. they are owed twice as much as the house is worth!

true but they can wait for the market to get back to where it was, even though it will probalby not be as high as it was.

icruse post also points out another good point that i left out.

There are some small banks (primarily credit unions) that do this sort of thing, but not exactly.

Most banks prefer to enter a short sale before they actually foreclose because they are going to lose even MORE money if they go to foreclosure.

As to why the houses sit like that, well, simple. Even when they are foreclosed on, there aren't any buyers in some areas. The banks, however, are responsible for maintaining the property if it is called for in the HOA bylaws. So if the HOA gets pissed, they could hire a company that charges 10k per visit to do the landscaping, and the bank would then have to pay.

In general though, banks are simply not set up to handle rentals. There is a whole mess of issues involved and liabilities that banks don't need to expose themselves to. The bank owns the note, so it isn't like renting it covers the mortage, in fact, it would most likely be an expense. Our management company has 2500 units under contract and I can tell you that it is a great business to be in, but very difficult to do RIGHT.