Picking a Safe Haven for Your Seller Held Mortgage Note

Even though the housing bubble burst in 2008, it doesn’t mean that mass foreclosures are hitting every community in America. There are still communities with stable housing markets out there. Investing in them can help make your seller-held mortgage note more secure and valuable. Increased security comes from the typical borrowers in these areas, who tend to be more stable and traditionally haven’t fallen to the temptations of predator lending. Value comes from reduced foreclosure rates, which help maintain property values. How do you identify these areas? Here are two tips:

Genuine High End Properties Do Better

Let’s draw a distinction between three types of properties that are typically called “high end.” In the first, high prices are obviously driven by property values. These include modest two bedroom homes selling for over a $1 million simply because they happen to sit on some very desirable land. Many of these properties are the product of over-building on expensive real estate, and were bought for investment purposes by people that got in over their heads. The second type is a remnant of speculation-driven construction: a new monster home designed to throw as much square footage on a parcel of land as possible. Look for the third type of high end property: one that features genuine built-in value. These homes are expensive because they actually have excellent features. They’re older properties typically purchased to live in, not flip. Houses with this kind of value are more often purchased by people with no special pressure to use unconventional instruments like subprime mortgages. This lowers their foreclosure rates, keeping property values afloat.

Go for Smaller Regions

Hawaii is traditionally a very safe real estate market, and that’s not just because it’s a tropical paradise. There just isn’t a lot of Hawaii to go around, so this limits speculation-powered overbuilding. People who want to buy certain properties in the Aloha State need to get in line, because demand still outstrips supply. Supply and demand also reach equilibrium in underpopulated areas, where there weren’t enough potential homeowners to support speculative construction. This principle applies across the US. For example, Wyoming, DC and Vermont are currently the bottom three in per capita foreclosures. Wyoming and Vermont are also at the bottom in population figures, so the housing boom didn’t catch on as rapidly. DC is geographically restricted, limiting over-construction.

Whether You Manage or Sell Your Note, Know Your Market

Picking the right spot to buy a property will help you whether you want to manage its mortgage note or, if you decide you’d prefer cash, sell it. Get a mortgage note quote from us and you’ll see the results.