Real estate contracting services are good businesses to start in today’s real estate market. Why? Because these types of service companies are in great demand and can make a fortune in a market riddled with foreclosures.
What is a Real Estate Service Business?
Real estate service, or “contracting,” businesses consist of the following types of services: lawn maintenance businesses, foreclosure clean-up companies, painting outfits, locksmith and handyman services, pressure washing and gutter cleaning enterprises, property inspectors, trashout firms, cleaning services, debris removal companies, and the like. (Electricians, plumbers and HVAC services also fall under this umbrella, payment reminder but they require licensing and certifications that may not be required under more generic service categories.)
Neighbors Complaining about Vacant Foreclosures
Banks and financial institutions must maintain foreclosed homes, many of which are sitting empty, or they can receive fines from the municipalities and counties in which their properties reside. Empty homes are not only eyesores in communities throughout the U.S., but magnets for drug activity and crime. Neighbors to these empty homes are increasingly banning together and reporting infractions to their counties before authorities get wind of them through formal channels. Some homeowners associations have even begun reaching out to foreclosure clean-up companies on their own and sending the invoices directly to banks and mortgage companies.
Banks and Mortgage Companies Must Maintain Foreclosures
Banks and mortgage companies must secure, maintain and manage homes that have been left vacant by previous tenants or homeowners. This means services such as window and door boarding, debris removal, cleaning, lock changing, lawn maintenance, winterization, gutter cleaning, repairs, etc., must be performed on these foreclosures.
More REO Homes to Flood Market
With the inventory of bank owned homes increasing, vacant homes through HUD, larger property preservation contractors, local housing authorities, and directly through banks and mortgage companies, can mean long-term, lucrative real estate services contracts for real estate contracting businesses such as foreclosure clean-up businesses and lawn maintenance companies.
In April and May of this year alone, the number of bank owned homes flooding the market outnumbered the number of REO homes being sold. And foreclosures are sitting vacant for longer periods of time. As more and more foreclosures hit the market, lenders will have a more difficult time unloading the surplus of foreclosures.