If you’re interested in purchasing property to rent or to flip, you may have heard about foreclosure properties . But before you jump in renting one, read these tips so you have a better idea of what you’re doing.
The topic of foreclosure generally brings to mind stories of homeowners who have fallen on hard times and lose their family home to the bank. But there’s another important demographic being negatively impacted by foreclosures – tenants. Just like owner-occupied properties, when a landlord falls on hard times and can’t pay the mortgage, the bank forecloses and often becomes the new owner of the rental property, as well as the new landlord.
As tenants in this situation quickly find out, banks do not want to be landlords. Banks typically want to sell foreclosure properties as quickly as possible, and that means evicting tenants as quickly as possible.
Here’s what to do if you’re a tenant renting a property that is being foreclosed on.
Be proactive. If the property you live in is being foreclosed on, the bank or its attorney will likely begin sending notices to the property. If you receive these notices, contact the bank or attorney immediately to let them know you are living in the property. Also contact your landlord and ask questions to find out why the property is being foreclosed on, the status of the foreclosure process and what your landlord is doing to prevent the foreclosure.