Banks are starting to nod seriously at the idea of becoming landlords. In truth, many have no choice; if they inherit a home with a tenant, they cannot simply put them out. In most scenarios, they must honor the existing lease of the previous landlord. (See Protecting Tenants at Foreclosure Act.) But many financial institutions are preparing to hold and rent out foreclosure homes by choice, instead of letting them go at fire sale prices at auction. This hold and rent tactic is appealing in great part because financial institutions will benefit when the market turns around.
According to an editorial via DSNews, the Federal Reserve recently acknowledged that some lenders might find it beneficial to simply make greater use of rental activities, considering the monumental volume of distressed homes on the market, coupled with the rising demand for rentals by consumers.
What this Means for Foreclosure Cleaning Companies
What does this mean for foreclosure cleaning businesses? It means the potential for fatter contracts. As banks become “landlords,” they will have to do a lot more than clean, secure and maintain homes; they will have to start repairing them and rehabbing them to compete effectively in the rental market.
This will mean more bidding opportunities for rehab and repair work for foreclosure cleanup business. This makes for greater earning opportunities for handymen, repairmen, HVAC workers, painters, electricians, plumbers, flooring workers and related industry contractors.
Foreclosure cleanup will fast teeter into foreclosure “maintenance” as banks and mortgage companies become landlords.
For existing foreclosure cleanup and REO trash out companies that offer cleaning and maintenance, they will be one step ahead of the competition; they will already be established and setup, with their billing, estimate-giving and job-scheduling routines in place.
Getting Prepared to Accept Larger Contracts
These established REO cleaning companies can get better prepared to refer out and subcontract out this work to other contractors in the industry with the necessary skills to repair homes.
Now is a good time for existing trash out companies to start building relationships with handymen, repairmen, HVAC workers, painters, electricians, plumbers, flooring workers and related industry contractors. How? By simply picking up the phone book, or doing a search online in their own city or town for related industry vendors.
Foreclosure cleaning companies can call these related contractors and introduce themselves and their companies.
An effective cold call conversation can include asking the related contractor if they’d like to be considered for referral or subcontracting work in the future. REO trashout companies should start building their databases now of “like” companies. This will get them better prepared to reach out to these contractors with referral and subcontracting opportunities as the market shifts to include more foreclosure maintenance and repair work.
Foreclosure cleaning companies already setup can also let these business owners know they are ready to assist them, too, if they come across customers needing the services their business provides.
Win-Win for the Real Estate Contracting Industry
As more and more banks and mortgage companies become landlords, whether by default or choice, it’s simply a win-win for the foreclosure cleaning businesses and related industry contractors. This shift in the market will provide opportunities for contractors to network and share in larger contracts via referral and subcontracting work.
If you’re a foreclosure cleanup business or related service provider, good luck to you as we get prepared to dip over into more foreclosure maintenance, repair and rehabbing services.