It has been acknowledged that there is indeed an economic downturn occurring or impending in many regions. We are also seeing increasing volatility in the equity and financial markets. Added to this, is the inflationary pressures that are bearing down on investors. Given this situation, many investors are turning to safer investments. In this context, property or real estate is beginning to get much more attention from investors seeking to cushion the effects of inflation. In countries or locations where property prices have leveled off or fallen and the number of foreclosures is rising, investors have a great opportunity to invest their money in a sector that offers better returns.

1. What would be a good foreclosure property investment? For residential properties it has always been location, location and location. As for commercial properties, the potential for business growth as well as business demand and supply have been key considerations. A further consideration for both properties will be price. Even in less favourable locations, low prices due to foreclosures may greatly influence the decision to invest.

2. Why is now a good time to purchase real estate? The financial crisis especially in the US has resulted in higher borrowing costs. Banks are now more cautious about who they lend to and are assessing, with greater diligence, the borrower'' capacity to meet their loan obligations. In fact, the sub-prime crisis in the US is going to have worldwide implications due to the tightening of credit. The UK had a close call with their "Northern Rock" episode. Those with cash or those who are ale to secure financing, would therefore be well positioned to purchase properties particularly those available before, during or after the completion of the foreclosure process.

What are some precautions to take when buying a property under foreclosure?

1. Ensure that the property is thoroughly inspected. The exercise might involve more than one inspection. It may even include a short period. Make an adequate provision for it. Most properties under foreclosure are in need of repairs as owners would have put off the repairs in favour of higher priorities due to their tight financial situation. Engaging a professional property inspection resource would pay dividends as they would be better able to identify the hidden repairs required. The cost of repairs would be a consideration in the final purchase price.

2. Secure a pre-qualification or pre-approval document from your financier which is usually a financial institution. This would be to your advantage during price negotiation for the property facing foreclosure or simply in being taken seriously when pursuing the deal.

3. Find out everything you need to know or learn about purchasing foreclosed properties. There are professionals who would be able to help you to get better deals and greater bargains. In the long their assistance would mean lesser or nil regret in the long term. Where do you look for the best deals? How do you find out when and where properties are due for foreclosure proceedings? Take the necessary precautions especially if you are not a professional real estate investor.

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