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How Foreclosure Investing Helps The Community |
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Foreclosures on homes create an opportunity for investors to not only personally profit, but can breathe life back into neighborhoods. Here's a scenario: an investor buys a foreclosed house and then makes necessary repairs and/or updates on the property, then that investor then can either sell the house at a greater profit because he made the repairs, or he uses it for rental property and makes money every month that it is rented.
This helps the surrounding community because the repair/update of the house beautifies the area, helping to raise the value of the other homes there as well. A neighborhood where the homes are attractive and occupied is more warm and inviting. Investors in foreclosures on homes can also help the economy of the community. Let's take the same scenario that we started above and consider the home the investor purchased is now generating money for the city or county by means of property taxes. This helps increase the tax base for road repairs, trash services, police and fire services. Along with the repair process for the properties, think about the foreclosures on homes themselves. The investor is required to use the services of title companies, real estate agents, as well as a lending institution.
Another thing to consider, particularly if you are in a high tax bracket, is using foreclosures on homes as a tax shelter. The development rights have some value and you are entitled to a charitable contribution deduction on your taxes for the value of the donation from foreclosures on homes. Property taxes would most likely to lower, as would the value of the property for estate taxes. Also, with foreclosures on homes the land is being used for conservation purposes, you get tax breaks and still own the land, a good for the environment and your bottom line.
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