Probate Property — What It Is and Why It Makes a Great Investment

Investing in real estate remains one of the most popular and successful ways to get into investing and making some serious money. 

As successful real estate investor Peter Hernadez says, “Most millionaires I know made more money from owning real estate than any other investment. Real estate consistently increases in value over time and outperforms other investments.”

Millennials are especially interested in getting into property investments after the real estate market has bounced back since the 2008 recession combined with the overall distrust of intangible stocks compared to the reality of physical properties. Though today’s economy may be in a state of flux, interest rates are at historic lows, making it a great time to buy.

If you’ve been thinking about getting into investing, or you want to expand your investment opportunities, we highly recommend looking into probate property investments. 

Let’s look a bit deeper into what a probate property is, how the process works, and why it’s such a good investment.

What Is a Probate Property?

The term “probate” refers to the legal process of distributing and classifying the possessions (including property) of a deceased individual. 

Examining the decedent’s will (if they had a will, that is), along with understanding their assets and properties, can be extremely complex and is usually handled by lawyers and the local court system called the probate court.

Probate property refers specifically to real estate properties owned by the deceased. 

There are a number of reasons why a probate property could be sold, which gives you ample opportunities for investment.

General Probate Process

Here’s how the probate process generally works:

Step 1: Proving the will and appointment of the executor.

The deceased often indicates an executor of their will within the will itself. If there was no executor named in the will, one will be appointed. Learn more about the role of the executor here.

Step 2: Taking inventory of all the estate’s assets. 

All of the assets including property, items, jewelry, heirlooms, furniture, etc, will be inventoried and examined for value. 

Step 3: Distribution / liquidation of the assets.

Depending on the type of assets along with the estate’s financial standing, assets will be divided and sold based on the will along with financial debts & considerations. It’s in this stage that a probate property could be purchased by investors.

Step 4: Settling the estate. 

In this final stage, everything should be finished and taken care of. This includes taking care of any taxes, debts, and any other assets that need to be distributed or sold.

Why Probate Properties Make Great Investments

There are quite a few reasons why investing in probate properties is a great investment strategy.

First of all, there are thousands of probate properties that become available every day. What’s more is that 70% to 80% of probate filings include real estate.

Another thing to note: for every one foreclosure, there are two probates. And with hundreds of thousands of foreclosures occurring each year, that shows you just how many probate opportunities there are.

Foreclosure rates have been on the decline recently as the housing market recovered from the 2008 recession. Unlike foreclosures, though, probate properties will always be around at a somewhat steady rate. The circle of life guarantees probate property availability while foreclosure homes depend on the current economic environment.

Another bonus for investing in a probate property is that you can usually purchase it for way below market value. Many heirs or relatives are highly motivated to sell the home or property quickly. And a motivated seller means an opportunity for you.

Quick sales combined with the high potential of buying for below the market value will increase your potential profits with each property.

Learn More About Probate Properties from an Expert

At Growing Edge Properties, we have years of experience investing in probate properties, foreclosed homes, and other amazing real estate investment opportunities.

If you want to learn more about getting into probate investments and buying & selling property, contact us today. We can work together to help you reach your real estate goals.