A growing number of savvy investors are profitting off of the volatile housing market by buying foreclosed homes from big banks and turning them into rentals.
With an excess of foreclosed homes on the market and the demand for rental homes skyrocketing, the business of flipping foreclosures into rentals is booming and is projected to be a $100 billion business this year, according to a report by CoreLogic.
Want in on the action?
RealtyTrac, an online marketplace for foreclosed and defaulted homes, released a list of the 10 best markets for foreclosed properties based on the foreclosure sale discount (or how much cheaper the foreclosed property is than non-distressed homes on the market), average foreclosed home values and the volume of bank-owned unsold homes in the area.
Here are the 10 top cities for investing in foreclosed properties.
1. San Luis Obispo, California
Average foreclosure sale price: $322,812 Foreclosure discount: 23.29 percent Bank-owned inventory: 7.95 months
Average foreclosure sale price: $204,702 Foreclosure discount: 44.64 percent Bank-owned inventory: 17.92 months
Average foreclosure sale price: $183,806 Foreclosure discount: 15.82 percent Bank-owned inventory: 9.20 months
Durham, North Carolina
Average foreclosure sale price: $154,951 Foreclosure discount: 24.68 percent Bank-owned inventory: 11.28 months
Average foreclosure sale price: $138,911 Foreclosure discount: 38.44 percent Bank-owned inventory: 13.61 months
Providence, Rhode Island
Average foreclosure sale price: $136,901 Foreclosure discount: 36.42 percent Bank-owned inventory: 14.63 months
Average foreclosure sale price: $130,763 Foreclosure discount: 22.48 percent Bank-owned inventory: 11.10 months
Average foreclosure sale price: $99,293 Foreclosure discount: 46.46 percent Bank-owned inventory: 13.92 months
Average foreclosure sale price: $95,092 Foreclosure discount: 34.76 percent Bank-owned inventory: 16.98 months
Average foreclosure sale price: $69,468 Foreclosure discount: 37.27 percent Bank-owned inventory: 15.33 months