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For rent: Foreclosed owners welcome

Bankrate Audio » For Rent: Foreclosed Owners Welcome

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Real Estate investors are buying foreclosed homes for cheap, and renting them to previous homeowners! I'm Lucas Wysocki with your bankrate.com personal finance minute.

In a strange but common financial scenario, many foreclosed homeowners are renting houses similar to the ones they lost or in some cases staying in their homes and paying rent instead of mortgage payments.

For real estate investors, the time has never been better to purchase a home, but the smart financial play is to wait for home prices to recover before selling. In the meantime, the investors are looking for tenants.

On the other side of the coin, foreclosed-on homeowners can only rent since they have damaged credit, or little money for a down payment. The situation is not ideal for many families who are paying more in rent than they would if they had purchased the same property at the current rates, but there is hope in the form of "lease option to buy" or "contract purchase" agreements, which give renters the option of purchasing the property after a few years renting.

For more financial news and advice, visit bankrate.com. I'm Lucas Wysocki.

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