Values for houses are most commonly determined by what Realtors call "comps" – meaning, "comparables" – recently sold and settled properties. In short, if your neighbor’s house just recently sold for a good price, that will help to increase the value of your house. On the other hand, if your neighbor’s house sold on the auction block, or as a short sale, for much less than comparable houses, this will tend to depress the value of your house.

When an investor buys a distressed property at auction, foreclosure, or short sale, the investor will pay far less than comparable neighborhood houses. Often, the condition of the property is far from ideal. Often, much work is needed to bring it back to its former value.

These types of sales of distressed properties, in your community, will tend to depress the value of your own house, lowering the price you could realistically expect to sell it for, and lowering its appraised value. However, the investor wants to make money; he or she will rehabilitate the house and resell at a good price. This will help raise the value of YOUR home.

Thus, the real estate INVESTOR has INCREASED the value of your own home, WITHOUT YOU DOING A THING.

But…what if, instead of an investor, the house is sold to another homeowner? Probably, the new owner will do some type of "handyman" work. Often the work will be inadequate, incorrect, and unsuitable for the property. If this homeowner remains there, or rents out the property to tenants, the low price paid stays on the land records, continuously depressing neighborhood home values. If there is much work to be done, chances are, in today’s market, the property will be foreclosed on again, thus even further depressing the neighboring properties’ values.

On the other hand, properties bought by investors, to rehab and sell, will have necessary repairs and upgrades done efficiently and properly, conforming to codes, in order to have a quick resale. This formerly distressed property is now in move-in condition, and will bring a much higher price. THIS will help increase the value of everyone’s home.

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