The pros & cons of buying a short-term rental property

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Have you ever considered buying a vacation property for a short-term rental? I think it’s a pretty common idea. And in a perfect world, it can combine the best of leisure and investing in one property.

 

I recently received a question from a reader who is considering taking the plunge:

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“My wife and I are in our mid 50’s, debt free, and own our home. We would like to have place that our family and kids could use while we explore future retirement areas near the vacation home.

 

Most traditional planners/CPAs advise against it but we’re curious what the Wealth Hacker view is.” – Thanks, Steve

 

Steve hasn’t asked specifically about the rental potential on the property. But since it’s a common outcome, I decided to include it in the pros and cons of buying a vacation property for short-term rentals. I’ll be addressing Steve’s direct questions, as well as the short-term rental aspect.

 

I’ll start by covering the pros, then move on to the cons. My hope is that by presenting both, I’ll not only answer Steve’s question, but also provide valuable information for other readers considering a vacation home purchase.

 

Pros of Buying a Vacation Property for Short-term Rentals

Without a doubt, there are real advantages to buying a vacation property for short-term rental. But before we get into those, I first want to be clear that we’re talking about these benefits as they relate to vacation property.

 

Put another way, a vacation property isn’t an investment property, so the benefits will be different.

 

While an investment property is strictly a money-venture, a vacation property is something of a hybrid. Much like the house you live in, a vacation property provides personal benefits, but has the potential to produce financial gains at the same time.

 

With that said, let’s move on to the pros of owning a vacation property.

1. You Can Generate Additional Income

If you buy a vacation property strictly for personal use, it’ll add an expense to your budget, and a major one at that. But by renting it out at least part of the time, you can generate some income from the property.

 

For example, let’s say the payment on your vacation is $1,500 per month. By renting it out one week out of each month, also at $1,500, you’ll cover the cost of keeping the home. But if you rent it out any more than one week each month, the property will generate a positive cash flow.

 

You can also get creative here. You can rent the house out during certain times of the year and keep it strictly for personal use the rest of the year.

 

Maybe you choose to rent the house out “in season” only. That might mean earning $2,500 per week for the 12 weeks of the peak season. That arrangement will cover the monthly carrying costs for the entire year, while producing a $12,000 profit.

 

Meanwhile, you’ll have the benefit of enjoying the home 40 weeks out of each year. In that way, the house will be an investment property 12 weeks out of the year, and a vacation home for the other 40.

2. You Can Earn Long-term Capital Appreciation

Most people find the house they live in to be one of the best investments they ever make. Even if you don’t view your primary residence as an investment, but rather as your home, it can work in both directions. The house you buy for $400,000 and live in for 20 years may be worth twice as much in the end. That’s a financial win-win of the best kind!

 

The same thing can happen with a vacation home. You might buy the property for $200,000, then it doubles to $400,000 twenty years later. Along the way, you’ll have enjoyed spending your vacations in the home, while also renting it out to generate income.

 

This is where it’s important to understand the leverage advantage that real estate provides.

 

Unlike most other investments, real estate is typically purchased primarily using borrowed money. That magnifies your investment returns by a lot.

 

If you purchased a $200,000 vacation property with a 20% down payment – $40,000 – and the value doubled to $400,000, you’ll really be earning a $200,000 profit on a $40,000 investment. That’s a 500% gain in 20 years!

 

At the same time, your 30-year mortgage will be paid down to about $98,000. The combination of price appreciation and mortgage amortization will increase your net equity to $298,000. That’s an amazing return on an investment of $40,000.

And remember, you’ll also get the benefit of enjoying the property as a vacation home.

3. Enjoy Generous Tax Benefits

Since your vacation home will be generating income, you’ll also be able to write off any expenses paid in connection with earning that revenue.

 

Let’s say you rent out the home 25% of the year. The IRS will allow you to deduct about 25% of the carrying costs of the property against the income it generates.

 

Expenses you can write off include mortgage interest, real estate taxes, property insurance, homeowner’s association dues, property maintenance, utility expenses, cleaning costs, supplies (for tenants), and management fees if you hire an outside service to manage the process.

 

Still another expense is depreciation. The IRS will allow you to depreciate the value of the home (not including the land value) over roughly 30 years. Since depreciation is what’s known as a paper expense, it will reduce your tax liability without costing you any money.

 

Of course, you can only apply depreciation to the business use of the home. If that’s 25%, you’ll only be able to depreciate 25% of the value of the house.

 

Speaking of income taxes, when you decide to sell the home you’ll get the benefit of long-term capital gains tax rates.

 

If your taxable income is $100,000, you’ll be in the 22% tax bracket for federal income tax purposes. But since the sale of the vacation home will be a long-term capital gain, you’ll pay only 15% on that gain.

4. You’ll Be Building a Real Estate Portfolio

One of the most common – and valuable – pieces of advice when it comes to investing is diversification. That’s about spreading your money over several investments. It not only minimizes potential losses from any single investment, but it will also give you access to more investment opportunities.

 

Because of the high cost of property, it can be difficult to diversify with real estate. But if you already own a primary residence, and you buy a vacation home, you’ll be diversifying your real estate portfolio across two properties.

 

If property values rise over the long term, as they usually do, you’ll get the benefit of capital gains on two properties, rather than one.

5. You’ll Have a Vacation Property for You and Your Family – Paid for by Your Tenants!

I touched on an example of this earlier, of renting out the home part of the year to cover the entire cost of owning it. Even if you don’t make a profit from the rentals, the revenue it generates will give you a cost-free vacation property.

 

Think about the thousands of dollars you’ll save each year over staying at hotels or renting out someone else’s vacation property. Then multiply those savings by 20 or 30 years.

 

The benefit could easily be worth well over $100,000. While that may not be a direct investment, it will free up plenty of cash to make other investments.

6. The Vacation Property Could Become Your Retirement Home

This benefit may not be so obvious because it isn’t financial. But it can be every bit as important. In fact, this gets to the meat of Steve’s question.

 

The vacation home you buy for a short-term rental can also serve as your retirement rehearsal. It’ll give you a chance to spend an extended amount of time in the vacation home. During that time, you can decide if the property will be the right retirement home for you.

 

Making a geographic move for retirement can be more stressful and disrupting than you anticipate.

 

But if you already live in the retirement destination, at least part of the year, you’ll already know the new community.

 

And even if you decide against your vacation home as your retirement home, it can help you to decide if the area it’s located in is the right one for you. If it is, you can sell your vacation home – and reap the profit – then buy another home in the area. You’ll already know the lay of the land, as well as local property values. That’ll remove a lot of the risk that comes with making a major move.

Cons of Buying a Vacation Property for Short-term Rentals

Even though there are a lot of benefits to buying a vacation property for short-term rental, there are an equal number of cons. Before taking the plunge, it’s important to know what those negatives are and to be prepared up front.

1. Vacation Homes Require Larger Down Payments and Have Higher Interest Rates

You’ve got to love those low-down payment, low-interest-rate mortgages you see advertised all the time.

Newsflash: they’re not available for vacation homes.

 

Let’s start with down payment requirement. Lenders permit a down payment of as low as 3% on a primary residence. If you’re eligible for a VA loan, you can get 100% financing – or 0 down payment.

 

But if you’re purchasing the vacation property, the minimum down payment requirement is 10%. Lenders may require a larger down payment if you have tighter qualifications. That can include higher debt ratios and lower credit scores.

 

Even if you can get a vacation home with a 10% down payment, you’ll be required to pay private mortgage insurance (PMI). That can increase your monthly payment substantially. If you’re buying a vacation property, you should plan on making a 20% down payment to minimize the payment.

 

Interest rates will also be higher. If the best rate available on a primary residence is 4%, expect to pay 4.5% for a loan on a vacation home.

 

You should also know that mortgage qualification will be more difficult with a vacation property. Since it’s considered to be a luxury purchase, lenders will look for a large down payment, a low debt-to-income ratio, and good or excellent credit.

 

One other point about qualification – you won’t be able to use rental income on a vacation home to qualify for the mortgage.

 

If you even indicate your intention to rent out the property, the lender will reclassify the home as an investment property.

 

They’ll require a minimum down payment of 20% and charge an even higher interest rate.

2. Not All Communities Welcome Short-term Rentals!

If you plan to buy a vacation home that you’ll rent out even on a short-term basis, you’ll need to do your homework. Not all communities welcome short-term rentals. They prohibit them under transient use restrictions. Find out if the community where your intended vacation property is located has such restrictions. If so, the short-term rental idea will be a non-starter.

 

Some condominiums also prohibit short-term rentals. It’s not usually the case in condominiums located in or near resort areas. But the restrictions vary from one condominium to another. You’ll need to find out in advance if there are any restrictions in a neighborhood. Even though the condominium is in a perfect vacation location, that particular neighborhood may have been built specifically for owner-occupants, not short-term tenants.

 

Just as important, there is a restriction on short-term rentals with mortgage lenders.

 

If a property is used for short-term rentals, it can be classified as a condotel. That’s a hybrid of the words “condominium” and “hotel”. It refers to a condominium that will essentially be used as a hotel.

 

While these are popular in resort areas, they’re a no-go with traditional mortgage lenders. Since they’re viewed as commercial properties, you’ll need to get a commercial mortgage to purchase one. That’ll mean an even larger down payment and a higher interest rate. The loan may also include more restrictive terms, like a variable rate mortgage with a term of only 10 years.

3. Tenants Can Damage the Property

Whenever you have tenants in a property, there’s always the possibility of damage. It’s even more likely with short-term rentals. Like a hotel room, you’ll have a revolving door or tenants using the property over the course of a year.

 

Not all tenants are entirely responsible. You can collect a deposit to cover potential damage, but you may need to bring legal action if the damage exceeds the deposit and the tenant refuses to pay.

 

Even if no single tenant does any real damage, having a dozen or more renters in the property each year for several years will require more maintenance and repair work than you’re probably doing on your primary residence.

That will translate into money out-of-pocket and time and effort on your part.

 

This is a good time to bring up homeowners’ insurance. To save money, you might be tempted to get a standard homeowner’s insurance policy on your vacation home. That’s a bad idea! Really bad!!!

 

A standard homeowner’s policy will cover only damage to the property from normal use by you, your family, and your guests.

 

If the property is damaged by a tenant, the insurance company won’t pay the claim. They may even terminate your policy for misrepresentation of its intended use.

 

You’ll need to get a special policy acknowledging the use of the property for short-term rentals. It’ll be more expensive than a standard homeowner’s insurance policy. But if you don’t have it, and your property is damaged or destroyed by a tenant, you’ll have no coverage under a standard policy.

4. Managing a Vacation Property is Not a Passive Activity!

Don’t count on your vacation property as being pure fun in the sun if you use it for short-term rentals. I’ve already covered the requirement for regular cleaning, repairs and maintenance. But that’s just the start.

 

You’ll also need to market the property to keep it rented. That will mean advertising the property, screening tenants, and handling the paperwork for each rental. You’ll also need to inspect the property after each rental to keep track of which tenant may have damaged the home.

 

To put it mildly, managing a vacation property with short-term rentals is a part-time job. The word “vacation” can quickly become overwhelmed by the reality that you’re running a business out of your second home. Yup, that’s what’s really happening.

 

There are management companies that will handle this for you. But if you go this route, expect to pay a fee of between 10% and 20% of the rental income on the property.

5. You Won’t Be Able to Use the Vacation Property Any Time You Want

There’s an inherent conflict with using a vacation property for short-term rentals. It’s likely you’ll want to be using the home at the very times of the year that will generate the most tenants and the highest rents.

 

So you buy a beach house, with the idea of spending a few weeks enjoying it during the peak of summer. But each week you’re using the home, you’ll be missing out on the highest rents of the year.

 

The problem is even bigger with resort properties. For example, a beach location will be most popular during the summer months. A house in a ski resort will be in high demand during winter. That kind of property may only have rental value during peak season.

 

If you like to go to the beach in the summer, or ski during winter, you may not get that chance – not if you want to maximize your income on the property. You might have it rented out during peak seasons, leaving you to enjoy it only in the off-season. That will maximize the investment return. But it’ll be done at a cost of compromising its vacation value.

6. The Property May Not Rise in Value

Property appreciation is not uniform across all markets. While it may be common in metropolitan markets, it’s less certain in resort areas. It’s possible a vacation property won’t rise in value at all and may even decline.

 

Resort properties are often in remote locations. They’re not suitable for year-round occupancy because there are few employment opportunities or other services that will appeal to permanent residents.

 

In resort areas that depend on the tourist trade, property values can fall if tourism slows. The decline can be even more dramatic if the area is also overbuilt. That’s common during years of heavy tourist traffic. But if that comes to an end, builders are stuck with unsold inventory, and property values fall throughout the community. The best example of this is what happened to property values in Miami during the last recession.

 

That doesn’t mean values are doomed to fall in resort area, or that they’ll never come back. But if you’re buying a vacation home for income purposes, it’s a risk you need to be aware of from the start.

Bottom Line

I hope that answers your question, Steve. If you’re looking to buy a vacation home mainly for personal use, the financial angle may not be as important. But if you’re interested in buying a vacation property for short-term rental, you’ll need to think of it as a business. The information in this response will help you do just that.

 

Also, if you would like to start investing but are unsure of whether to invest in real estate or index funds, read my post on Real Estate vs. Index Funds.

 

This article originally appeared on GoodFinancialClients.com and was syndicated by MediaFeed.org.

 

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Places in the US where foreclosures are soaring

 

With foreclosure activity up steadily between July and August, the experts at ATTOM Data Solutions consider this a sign that foreclosure starts are returning to 2019 levels–foreclosure starts in August 2022 were over 85% of what they were in August 2019.

 

While foreclosure activity has been on the rise since the expiration of pandemic relief programs, the good news is that experts believe repossessions will be even lower than before the pandemic due to a majority of borrowers in foreclosure having positive equity in their homes. This means that borrowers can sell their properties at a profit and avoid foreclosure auctions or lender repossessions.

 

Despite mortgage interest rates blasting through the 6% threshold for the first time in roughly 14 years, and fears of a recession continuing to make headlines, home prices show no signs of dramatically cooling off. For instance, the July 2022 median U.S. home price of $403,800 was nearly 11% higher than the $364,600 median U.S. home price in July 2021. At the same time, the housing supply remains at a deficit, which experts expect to continue for the foreseeable future due to a combination of factors, such as a shortage of construction labor, zoning restrictions, and raw material costs.

 

The overall rate of foreclosure filings increased by close to 14% between July and August. This uptick follows the dip in foreclosure activity between June and July, which experts believed was likely related to a typical Q3 seasonal drop. The number of U.S. properties with foreclosure filings in August was 34,501, according to ATTOM Data Solutions. This is up close to 118% from a year ago when foreclosures remained at historic lows due to federal government and mortgage servicing industry pandemic protections.

 

Read on for the foreclosure rates in August 2022 – plus the five counties with the highest rates within those states.

 

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As noted, foreclosure rates rose steadily compared to last month, but are up significantly compared to last year. Read on for August foreclosure rates for all 50 states — plus the District of Columbia — beginning with the state that had the lowest rate of foreclosure filings per housing unit.

 

 

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Ranking in population between Vermont and Alaska, the country’s 49th and 48th least populated states, Washington, D.C. had 30 foreclosures in August. With a total of 350,364 housing units, Washington, D.C.’s foreclosure rate was one in every 11,679 households, putting it in between the states of Kentucky (#46) and Nebraska (#45).

 

 

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In 49th place for population, Vermont claimed the 50th spot for its foreclosure rate. Of the Green Mountain State’s 334,318 housing units, three homes went into foreclosure at a rate of one in every 111,439 households. Only three counties saw foreclosures. The counties with the most foreclosures per housing unit were (from highest to lowest): Grand Isle, Lamoille, and Windham.

 

 

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North Dakota’s foreclosure rate was one in every 37,064 homes. That puts the fourth least populated state – with 370,642 housing units and 10 foreclosures — in 49th place. Only four counties saw foreclosures. The counties with the most foreclosures per housing unit were (from highest to lowest): Cass, Morton, Ward, and Grand Forks.

 

 

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South Dakota slipped to the 48th spot in August. Having 389,921 total housing units, the fifth least populated state had a foreclosure rate of one in every 35,447 households with 11 foreclosures. The counties with the most foreclosures per housing unit were (from highest to lowest): Faulk, Mccook, Codington, Clay, and Minnehaha.

 

 

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The 39th most populated state, West Virginia, ranked 47th once again. It has 855,635 homes, of which 58 went into foreclosure. That means the foreclosure rate was one in every 14,752 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Marion, Kanawha, Upshur, Raleigh, and Wayne.

 

 

 

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With a total 1,994,323 housing units, Kentucky saw 148 homes go into foreclosure. That put the foreclosure rate for the 26th most populated state at one in every 13,475 households and in 46th place. The counties with the most foreclosures per housing unit were (from highest to lowest): Hardin, Estill, Muhlenberg, Campbell, and Lyon.

 

 

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Ranked 37th for population, Nebraska claimed the 45th spot with a foreclosure rate of one in every 10,172 homes. With a total 844,278 housing units, the state had 83 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Deuel, Garfield, Gosper, Cherry, and Kimball.

 

 

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The 44th most populated state took the 44th spot. With 51 foreclosures out of 514,803 housing units, its foreclosure rate was one in every 10,094 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Wheatland, Roosevelt, Sheridan, Dawson, and ​​Big Horn.

 

 

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The 38th most populated state, Idaho had 78 homes go into foreclosure. With 751,859 total housing units, the state’s foreclosure rate was one in every 9,639 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Shoshone, Washington, Fremont, Nez Perce, and Benewah.

 

 

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With 299 foreclosures out of 2,727,726 total housing units, Wisconsin, the 20th most populated state, had a foreclosure rate of one in every 9,123 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Douglas, Pepin, Clark, Forest, and Taylor.

 

 

FierceAbin

 

Ranked 13th for most populated state, Washington came in 41st place for highest foreclosure rate. It has 3,202,241 housing units, of which 362 went into foreclosure, making the state’s foreclosure rate one in every 8,846 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Pend Oreille, Mason, Cowlitz, Lewis, and Benton.

 

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The 27th most populated state ranked 40th for highest foreclosure rate. Of Oregon’s 1,813,747 homes, 219 went into foreclosure, making for a foreclosure rate of one in every 8,282 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Grant, Columbia, Multnomah, Linn, and Clackamas.

 

 

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Ranked 33rd for most populated state, Arkansas took the 39th spot for highest foreclosure rate. It has 1,365,265 housing units, of which 177 went into foreclosure, making the state’s latest foreclosure rate one in every 7,713 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Saint Francis, Calhoun, Poinsett, Hot Spring, and Sharp.

 

 

 

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The 41st most populated state, New Hampshire, ranked 38th for highest foreclosure rate. Of 638,795 homes, 84 went into foreclosure, making for a foreclosure rate of one in every 7,605 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Cheshire, Sullivan, Strafford, Carroll, and Merrimack.

 

 

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The 40th most populated state, Hawaii, came in 37th for highest foreclosure rate. Of 561,066 homes, 75 went into foreclosure, making for a foreclosure rate of one in every 7,481 households. Only three counties in the state had foreclosures. They were (from highest to lowest): Honolulu, Hawaii, and Maui.

 

 

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The 15th most populated state ranked 36th for highest foreclosure rate. Of Massachusetts’ 2,998,537 housing units, 414 went into foreclosure, making for a foreclosure rate of one in every 7,243 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Hampden, Berkshire, Plymouth, Franklin, and Worcester.

 

 

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The 36th most populated state took the 35th spot for highest foreclosure rate. Of its 940,859 homes, 133 went into foreclosure, making for a foreclosure rate of one in every 7,074 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Chaves, Cibola, Colfax, Sandoval, and Valencia.

 

 

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In Mississippi, the 34th most populated state, there were 189 foreclosures out of 1,319,945 housing units. That put the foreclosure rate at one in every 6,984 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Sharkey, Coahoma, Jackson, Clay, and Marshall.

 

 

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The 19th most populated state, Missouri came in 33rd for highest rate of foreclosures. Of its 2,786,621 homes, 411 went into foreclosure, making for a foreclosure rate of one in every 6,780 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Pulaski, Lafayette, Caldwell, Holt, and Dallas.

 

 

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In Arizona, the 14th most populated state, there were 489 foreclosures out of 3,082,000 housing units–the same as July. That put the foreclosure rate, once again, at one in every 6,303 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Graham, Cochise, Pinal, Mohave, and Yavapai.

 

 

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Pennsylvania had the 31st highest foreclosure rate. The fifth most populated state had a total of 963 housing units out of 5,742,828 homes go into foreclosure, making the state’s foreclosure rate one in every 5,963 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Delaware, Bucks, Wyoming, Berks, and Montgomery.

 

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Ranked 22nd for most populated state, Minnesota took the 30th spot for highest foreclosure rate. It has 2,485,558 housing units, of which 422 went into foreclosure, making the state’s foreclosure rate one in every 5,890 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Faribault, Sherburne, Fillmore, Rice, and Anoka.

 

 

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In Tennessee, the 16th most populated state, there were 524 foreclosures out of 3,031,605 housing units. That put the foreclosure rate at one in every 5,786 homes and in the 29th spot. The counties with the most foreclosures per housing unit were (from highest to lowest): Mcnairy, Humphreys, Roane, Hancock, and Haywood.

 

 

 

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The 21st most populated state ranked 28th for highest foreclosure rate. Of Colorado’s 2,491,404 housing units, 432 went into foreclosure, making for a foreclosure rate of one in every 5,767 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Pueblo, Morgan, Adams, Weld, and Alamosa.

 

 

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Ranked 25th for population, Louisiana took the 27th spot, with 365 homes out of a total of 2,073,200 housing units going into foreclosure. That means Louisiana had a foreclosure rate of one in every 5,680 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Livingston, La Salle, Tangipahoa, Ascension, and West Baton Rouge.

 

 

 

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Utah placed 26th for highest foreclosure rate. Of the Beehive State’s 1,151,414 housing units, 206 homes went into foreclosure, making the 30th most-populated state’s foreclosure rate one in every 5,589 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Juab, Tooele, Sanpete, Box Elder, and Sevier.

 

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Kansas took the 25th spot. With 1,275,689 homes and a total of 231 housing units going into foreclosure, the 35th most-populated state’s foreclosure rate was one in every 5,522 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Wyandotte, Cowley, Geary, Osage, and Butler.

 

 

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Ranked as the ninth least populated state, Maine placed 24th for highest foreclosure rate. With a total of 739,072 housing units, the Pine Tree State saw 136 foreclosures for a foreclosure rate of one in every 5,434 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Somerset, Waldo, Penobscot, Knox, and Aroostook.

 

 

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The eighth least populated state took the 23rd spot for highest foreclosure rate. A total of 91 homes went into foreclosure out of 483,474 total housing units, making the foreclosure rate for the Ocean State one in every 5,313 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Kent, Bristol, Newport, and Washington.

 

 

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Ranked the least populated state in the country, Wyoming claimed the 22nd spot for highest foreclosure rate. With 271,887 housing units, of which 53 went into foreclosure, the state’s foreclosure rate was one in every 5,130 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Carbon, Platte, Natrona, Sweetwater, and Campbell.

 

 

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The 12th most populated state ranked 21st for highest foreclosure rate, with 728 homes going into foreclosure. Having 3,618,247 total housing units, the state saw a foreclosure rate of one in every 4,970 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Portsmouth City, Waynesboro City, Hopewell City, Charlotte, and Covington City.

 

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Ranked 24th for most populated, Alabama came in 20th for highest foreclosure rate. Of its 2,288,330 homes, 489 went into foreclosure, making for a foreclosure rate of one in every 4,680 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Henry, Houston, Cherokee, Calhoun, and Elmore.

 

 

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Alaska saw 69 foreclosures, making the foreclosure rate one in every 4,602 homes. That caused the third least populated state, with a total of 317,524 housing units, to take the 19th spot. The counties with the most foreclosures per housing unit were (from highest to lowest): Anchorage, Ketchikan Gateway, Matanuska-Susitna, Fairbanks North Star, and Kenai Peninsula.

 

 

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The Lone Star State saw 2,538 foreclosures. With a foreclosure rate of one in every 4,566 households, this put the second most populous state with 11,589,324 housing units into the 18th spot. The counties with the most foreclosures per housing unit were (from highest to lowest): Liberty, Wilbarger, Atascosa, Franklin, and Hardeman.

 

 

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Iowa had the 17th highest foreclosure rate. With 320 housing units out of 1,412,789 homes going into foreclosure, the 31st most populated state’s foreclosure rate was one in every 4,415 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Guthrie, Wayne, Calhoun, Clinton, and Adams.

 

 

JoeChristensen

 

Oklahoma claimed the 16th spot. With housing units totaling 1,746,807, the 28th most populated state saw 400 homes go into foreclosure at a rate of one in every 4,367 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Canadian, Kingfisher, Oklahoma, Cleveland, and Ottawa.

 

 

 

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With 363 of its 1,530,197 homes going into foreclosure, Connecticut had the 15th highest foreclosure rate at one in every 4,215 households. In the 29th most populated state, the counties that had the most foreclosures per housing unit were (from highest to lowest): New Haven, Hartford, Windham, Fairfield, and Litchfield.

 

 

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Ranking 10th in population, Michigan took the 14th spot with a foreclosure rate of one in every 4,002 homes. With a total of 4,570,173 housing units, the state had 1,142 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Muskegon, Van Buren, Cass, Berrien, and Saint Joseph.

 

 

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The eighth most populated state, Georgia ranked 13th for highest foreclosure rate. Of its 4,410,956 homes, 1,161 were foreclosed on. That put the state’s foreclosure rate at one in every 3,799 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Richmond, Pulaski, Elbert, Candler, and Liberty.

 

 

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With 2,295 out of a total 8,488,066 housing units going into foreclosure, the fourth most populated state took the 12th spot. New York’s foreclosure rate was one in every 3,699 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Steuben, Seneca, Washington, Livingston, and Putnam.

 

 

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The ninth most populated state took 11th place for highest foreclosure rate. Out of 4,708,710 homes, 1,282 went into foreclosure. That put the Tar Heel State’s foreclosure rate at one in every 3,673 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Gates, Onslow, Pasquotank, Jones, and Columbus.

 

Recommended: Your 2022 Guide to All Things Home

 

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The country’s most populated state ranked 10th for highest foreclosure rate. Of its 14,392,140 housing units, 4,241 went into foreclosure, making California’s foreclosure rate one in every 3,394 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Lake, Trinity, Kern, Merced, and Yuba.

 

 

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Ranking 32nd in population, Nevada took the ninth spot for foreclosure rate. With one in every 3,380 homes going into foreclosure, and a total of 1,281,018 housing units, the state had 379 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Clark, Elko, Humboldt, Nye, and Washoe.

 

 

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Ranked 18th for most populated state, Maryland took eighth place for highest foreclosure rate. With a total of 2,530,844 housing units, of which 775 housing units went into foreclosure, the state’s foreclosure rate was one in every 3,266 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Charles, Saint Marys, Cecil, Prince George’s County, and Washington.

 

 

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The 17th largest state by population, Indiana took the seventh spot with a foreclosure rate of one in every 3,120 homes. Of its 2,923,175 homes, 937 homes were foreclosed on in August. The counties with the most foreclosures per housing unit were (from highest to lowest): Blackford, Vigo, St Joseph, Wayne, and Noble.

 

 

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Ohio took sixth place in August with a foreclosure rate of one in every 2,955 homes. With a total of 5,242,524 housing units, the seventh most populated state had a total of 1,774 filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Cuyahoga, Pickaway, Paulding, Fairfield, and Preble.

 

 

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The third most populated state in the country has a total of 9,865,350 housing units, of which 3,344 went into foreclosure. The state’s foreclosure rate is one in every 2,950 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Calhoun, Gadsden, Hamilton, Gilchrist, and Duval.

 

 

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With a foreclosure rate of one in every 2,441 homes, New Jersey slipped out of the top three, placing fourth for highest foreclosure rate. The 11th most populated state has 3,761,229 housing units, of which 1,541 went into foreclosure. The counties with the most foreclosures per housing unit were (from highest to lowest): Cumberland, Sussex, Camden, Gloucester, and Salem.

 

 

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With one in every 2,417 homes going into foreclosure, South Carolina took the third spot. Ranked 23rd for population, South Carolina has 2,344,963 housing units and saw 970 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Kershaw, Barnwell, Richland, Dorchester, and Lexington.

 

 

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The sixth least populated state in the country, Delaware fell from the top spot for highest foreclosure rate. With one in every 2,387 homes going into foreclosure and a total 448,735 housing units, Delaware saw a total of 188 foreclosure filings. With only three counties in the state, the most foreclosures per housing unit were in (from highest to lowest): New Castle, Kent, and Sussex.

 

 

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Illinois made the top spot for highest foreclosure rate. Of its 5,426,429 homes, 2,818 went into foreclosure, making the sixth most populated state’s foreclosure rate one in every 1,926. The counties with the most foreclosures per housing unit were (from highest to lowest): Peoria, Crawford, Mcdonough, Kendall, and Macoupin.

 

 

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Of all 50 states, California had the most foreclosure filings (4,241); Vermont had the least (3). As for the states with the highest foreclosure rates, Illinois, Delaware, and South Carolina took the top three spots, respectively.

 

Two regions – The Great Lakes and the Mideast – tied for having the largest presence among the 10 states that ranked the highest for foreclosure rates. The states in the Great Lakes region were (from highest to lowest): Illinois, Ohio, and Indiana. The states in the Mideast region were (from highest to lowest): Delaware, New Jersey, and Maryland.

 

The Plains region had the largest presence among the 10 states that ranked the lowest for foreclosure rates. The states were (from highest to lowest): Nebraska, South Dakota, and North Dakota.

 

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This article originally appeared on SoFi.comand was syndicated by MediaFeed.org.

 

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