Banks create thousands of opportunities for real estate investors

Banks seized 133,811 homes in the U.S. during the third quarter of this year, roughly the same as in the second quarter. But the number spiked by 66 percent compared to the year before. 

A lot of these properties have been in default for a long time and are likely vacant. That means they may eventually sell at discounted prices that drag down overall home prices in their markets. These thousands of foreclosed homes may also provide an opportunity for investors. And according to RealtyTrac many of these homes will be hitting the market for sale in the next six to 12 months. 

Individual real estate investors score big in blue-collar markets

I’ve been saying this for years: If you want to build a profitable portfolio of investment properties, avoid high-price homes in upscale markets. Instead, go for older single-family homes in working class, blue-collar neighborhoods. And RealtyTrac recently confirmed my philosophy.

The data firm found that the highest yields for single-family homes can be found in secondary and tertiary neighborhoods in secondary and tertiary markets. These somewhat older homes in older neighborhoods are benefiting from rent growth and strong demand for rental housing. And they are far away from the places where institutional investors have bought thousands of rental homes.

According to RealtyTrac, in some of those blue-collar markets the average home price is well under $50,000 and average rents are significantly higher than $1,000 a month, adding up to annual rental yields of over 30 percent. 

You can read more about RealtyTrac’s findings by clicking here.