What Are The Downfalls Of Renting A Pre-foreclosure Home?
Posted on
October 14th, 2009
by Jerry
I found a few houses (very nice ones, btw) that are in pre-foreclosure. The rent is usually btwn 650-1,000 per month (but I assume they mean, we’d be taking over the mortgage, not “renting” which is fine with us.) But, are there any downfalls? Like, will the amount increase annually? Are they super-dirty? Are there any hidden costs? ETC?
The houses in pre-foreclosure may have different situations such as renting one may only be temporary because once the bank owns the property due to foreclosure they can sell it and then your soon to be out of a home to rent. Some banks may let you keep renting because they are hardly able to lend out any more money for a home loan.
Generally the situation is that someone cant afford their mortgage payments so they plan to rent the house to pay the mortgage instead of loosing it altogether.The risk is that the house can be for-closed on and you would be evicted. You will also be dealing with a landlord who is inexperienced and not primarily a landlord, so expect problems and delays when you need something fixed.
You are not taking over the mortgage, just paying it. the house will never be yours, and any equity will belong to the owner.