As a real estate professional, you have a strong understanding of the local market. At the same time, the market is changing quickly, and it has become more competitive. As a result, you might be wondering how you can get creative and stand out from the crowd. One option is to purchase a condemned house, but is this a good idea? What do you need to know? There are a few important points to keep in mind.
What is a condemned house?
A condemned house is a home that has been deemed unfit or unsafe for occupancy. If a house has been condemned, it is not allowed to be lived in until the issues that originally got it condemned have been fixed. If someone is living in a house when it is condemned, the people living there will have to find someplace else to go.
There are numerous reasons why a house might get condemned. Some of the most common reasons include:
- The plumbing system might not be safe, and there could be toxic chemicals in the water supply.
- The electricity might not have been installed properly, significantly increasing the risk of someone getting electrocuted or the house catching fire.
- There might be issues related to the roof, causing the house to be in danger of collapsing.
- There might be a structural issue with the foundation, which could also increase the chances of the house collapsing.
It can be a significant challenge to address issues related to a condemned home, and that is why a lot of people rely on a real estate professional to help them address these issues.
How does a house become condemned?
Generally, the condemnation procedure for a house is directly tied to the local housing authority, the state government, or the local government. The exact agency in a specific jurisdiction responsible for labeling a house as condemned can vary from place to place. Generally, a house will not be reviewed for condemnation until a complaint is brought by a concerned citizen. For example, neighbors might notice that the house has fallen into a state of disrepair, and they could reach out to the local housing authority for help. Or, a real estate professional might review the house and address concerns, prompting the authorities to take a closer look at the home. There are some situations where multiple agencies might be involved in labeling a house as condemned.
What Is a Condemned House vs a Vacant House?
There are some people who assume that just because the house is vacant it has been condemned. There is some overlap between these two terms, but they are not the same things. By definition, a condemned house is supposed to be vacant. Nobody is supposed to be living in a condemned house, so it should be categorized as condemned. If someone is living in a condemned house when it is condemned, they usually have a set timeframe within which they have to vacate the property.
On the other hand, a vacant house simply means no one is living there. It is true that a house could be vacant because it has been condemned, but there are plenty of other reasons why a house might be vacant as well. They include:
- Someone may have recently bought the house, and they might not have moved in yet.
- The person living in the house may have passed away, and that person’s heirs or descendants might not be occupying the house.
- The house could be a vacation home, so it does not have someone living in it at all times.
- The house might be a long-term rental property that is in between residents.
A vacant house does not have to be condemned.
Can You Buy a Condemned Home?
Yes, it is possible for you to purchase a condemned house, but the process is not straightforward. Because the house has been condemned, you are not allowed to purchase the structure. Instead, you will have to purchase the land on which the house sits. Because the house has been condemned, it does not have any intrinsic value because it is not able to be occupied.
On the other hand, the land still has value. Therefore, if you are interested in purchasing a condemned house, you will need to purchase the land. There are several reasons why you might be interested in purchasing a condemned house as a real estate professional. They include:
- You may have connections throughout the local industry that you can use to get the house repaired quickly and efficiently.
- It could represent a significant investment opportunity, as you might be able to fix the house and sell it for a premium.
- The land itself might still be valuable, so it could be an attractive investment opportunity.
- There will not be a lot of competition for a condemned house, particularly because most people do not know how to fix a condemned home.
These are a few of the biggest reasons why you might be interested in purchasing a condemned house as a real estate professional.
What Are the Safety Issues of a Condemned Home?
Clearly, a house has been condemned because it is no longer considered safe. At the same time, the exact safety issues you might face could vary depending on the reason why the house has been condemned.
Some of the biggest potential safety issues of a condemned house include:
- If there is something wrong with a load-bearing beam, the house might be in danger of collapsing.
- The power might not have been turned on in quite a while, so you need to make sure the house does not catch fire when you restore the power.
- There could be a potential water safety issue, so you may want to get the water tested before you turn it back on.
Before purchasing a condemned house, you must make sure that you understand all of the potential safety issues.
How Much Does a Condemned Home Cost?
There are lots of factors that will play a role in the potential price of a condemned house. Generally, you should be able to purchase the property at a discount because you will only be paying for the land. At the same time, there could be some issues getting financing for a condemned house.
A traditional lender will probably be reluctant to give you financing for a condemned house because they might be worried about getting their money back. The house is unlikely to appreciate in value if the structural issues are not fixed. Therefore, you may need to get financing from a hard money lender.
Contact Investor Nitro To Maximize Your Real Estate Investment Opportunities
A condemned house could be an attractive investment opportunity, but the real estate market has gotten more competitive. You need to get your name out there as quickly as possible if you want to take advantage of every investment opportunity. We are Investor Nitro, and we have already worked with countless real estate professionals, helping them build thriving businesses. If you would like to learn more about how we can help you, contact us today to speak to a member of our team.