Foreclosures no Longer the Hot Ticket to Income

Would-be investors buying foreclosed homes at auction and renting them are finding the trough is drying up, as auction prices have risen faster than rents, according to Core Logic, resulting in returns on investment (ROI) dropping. “It’s gotten so competitive that discounts at foreclosure are not where they were,” said Daren Blomquist, spokesman for RealtyTrac. “It’s harder for third party purchasers at auction to make a profit.” ROI fell in eight of the top ten best buy-and-rent cities, including Tampa, which was the top city in 2012, and the same for Chicago in 2013. According to, of the top ten only Houston and Charlotte, NC gained in average returns. Nationally, MHProNews has learned, homes sold in foreclosure auctions now only cost four percent less than average sales, compared to the 16 percent differential in 2012. Additionally, while home prices increased almost 14 percent through October, 2013, rents for the first nine months rose only 2.2 percent, compared to the same period of 2012.

(Photo credit: Wikipedia)

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