Even as the real estate market stabilizes and continues to improve, there are still a ton of vacant properties sitting empty in cities across the nation. Too many of these are bank-owned or REO properties. Such properties present a great deal of risk to the companies that own them, from fines by local municipalities and governments to damage that can make the property less likely to sell.
Managing these risks is essential to preventing loss, and to increasing your chances of selling the home fast, and at a good cost. Learn how to reduce risk in REO property management, including how a management and services firm can be your best option for value and a quick sale.
Major Risks in REO Property Management
Some of the biggest risks in REO property management are related to the costs you incur from being unable to insure a vacant property. This means that if windows get broken, retaining walls collapse, or there’s issues from any other condition, you’ll have to pay for them out of pocket.
Such damage can come from weather, from squatters that move in, from other environmental conditions, or simply from decay that comes from disuse. It’s essential to manage these risks to keep the property an investment rather than a resource drain.
Protect the Home
The best way to protect the home from risks of squatters or vandals is to make it appear lived in. Make sure that the yard and landscaping are always kept immaculate. Cut the grass, trim the hedges and trees, keep the edging done well. Plant flowers in the flower bed. Consider leaving the electricity on and install a timer to keep the lights on and off at specific hours. Allow a neighbor to park in the driveway temporarily.
This will discourage vandals and squatters from creating damage that will cost thousands of dollars to repair.
Keep Up with Repairs and Maintenance
Every property requires ongoing maintenance. Those properties that aren’t lived in tend to deteriorate much faster than those that are in use. This means you need to regularly check up with it to be sure the wiring is still good, the pipes solid, the structure sound. Check for pest infestations, make sure pipes don’t freeze in the winter, and keep the home in overall good condition.
Performing upgrades on old aspects of the house via some basic remodeling is never a bad idea. It may cost a bit up front, but it’ll add to the overall value and structural integrity.
Hire a Property Management Service
The best way to handle REO property management and reduce risks is to hire a property management service. Such a service, like First Freedom Preservation, can come in and stay on top of all the issues your property might face. They will deal with issues like vandals and squatters, take care of landscaping and maintenance, and will provide regular reports and a portal where you can always track your payments, finances, and property needs. If you’d like to explore this option for managing risk on our property, call FFP today.