Foreclosure Cleanup Business License

Unfortunately, there will always be houses placed in foreclosure. Fortunately for you, you’re always going to be busy with a foreclosure cleanup business.

As the old adage goes, one person’s misery is another person’s happiness. Either way, you’re going to be a busy bee if you get into the business of cleaning out foreclosed houses. 

From the standpoint of profitability, you’re looking at a lucrative business. It can be a messy job, but somebody has to do it. And that person can be you.

If you’re willing to get your hands dirty, you can expect to grow your foreclosure cleanup business into a success. With a little research and hard work you can be making money in no time.

The first thing you have to do is acquire a license for your foreclosure cleanup business. There isn’t a whole lot of permits and licensing involved, but we’ll go over those details in this article.

We’ll also cover all the other basics and important information you should know before jumping into this industry. 

What Is a Foreclosure Cleanup Business?

Typically, a homeowner has 120 days to catch up on their mortgage payments. When they fail to do so, the mortgage servicer begins the foreclosure process.

Once the homeowner has forfeited their property, the house becomes bank-owned property or real estate owned. Bank owned properties are then sold on the open market or by auction. But before that happens, the house must be cleaned out and restored.

And that’s where foreclosure cleanup companies come into the picture. 

Foreclosure cleanout businesses started to pick up steam during the housing crisis. Since then they have been popping up in towns and cities across the US and Canada.

It’s unfortunate that the housing bubble burst due to high-risk loans on properties given out by the banks. But that opened the door for a new type of business opportunity, foreclosure cleanup businesses. 

It’s important to note that many houses are left in disarray. Most of these people lost their properties during a difficult time in their lives. Many of them were angry at the banks and took their frustration out on the house.

For this reason it’s important to have a legal business license and the appropriate permits to clean out these properties. Each job will have its own difficulties and dangers.

It’s important to keep an open mind for each job and have the right permits to complete each task. 

The basics of the job typically include:

  • Removing items and furniture left behind
  • Total cleaning of the entire property
  • Debris and rubbish removal
  • Minimal construction (painting, repairs)
  • Yardwork
  • Changing locks 

Foreclosure cleaning can also extend to businesses that have foreclosed. Business cleanings are usually smaller jobs due to their nature. In most cases, business cleanings don’t involve a lot of construction or repairs. 

How Much Do Foreclosure Cleaners Make?

Foreclosed properties usually have a lot of clutter and furniture that needs to be removed. Large jobs are common. You’re probably going to have to work long days and weekends.

In most cases, you’ll have to pay for dump runs and rental equipment. Since this isn’t a general house cleaning, you’ll be making a lot more money than regular house cleaners.

Many foreclosure cleaning businesses claim to make anywhere from $700 to $3,500 per house. It’s important not to charge a fixed price for your services. Always keep an open range and never cap your estimate for jobs. So many different issues can arise during a foreclosure cleanout.

Make sure to also charge for all the expenses needed to finish the job properly. You may need to rent pressure washers, purchase paint, and any number of things.

Some foreclosure cleaners even make extra cash from selling the furniture and items left behind. Selling those items can bump up your earnings and make your company more profitable. Selling large furniture also helps to save money and time on dump runs. Remember, your time is valuable. 

Obtaining a License For Your Business

Depending on where you live and which services you are going to provide, you need to first learn about your local city and province rules and regulations. Laws can change between different areas in Canada, so you’ll want to be well versed in your municipal area.

That way you can get a better idea about which business license to obtain. Whether you want to be a sole proprietorship, general partnership, or a tradename.

You should ask your administration about the appropriate acts and regulations. It’s important to know which levels of government need to be contacted for a foreclosure cleanup business. You can see the prices for the correct permits and licenses in your area on the government website.

Lastly, you want to be bonded and insured because of the nature of the business. Not only do you want any damages to be covered, but you also want your employees to be protected if they get injured.

While it’s not necessarily required in all areas to be bonded and insured, it is a helpful marketing tool to win over clients. 

What You Need to Start a Foreclosure Cleaning Business

First thing’s first. You want to be a legitimate business entity. You’ll want to acquire all the required licenses and insurance to clean foreclosed properties. You want to start with a business license first. 

After that, you’ll need liability insurance. Most clients these days will ask to see your liability insurance and license because of the potential dangers of the job.

Next, you’ll want to make sure that your communication channels are in order. Purchase work cell phones, business cards, and create a simple website with a work email address.

After that, reach out to locksmiths, independent contractors, cleaners, painters, and so forth. 

Foreclosure cleanups involve hiring a number of services to complete jobs. You want to know how much they charge and their availability before making bids.

Lastly, you want to purchase the right supplies and equipment. That can range from a truck or van to a pressure washer and tools. 

You can always start out with the bare essentials, but eventually, you’ll want to right cleaning supplies for the job. By owning your own equipment you won’t have to rent out for each job. That’ll help to outbid your competitors and win more properties.  

How to Market Your Foreclosure Cleaning Business


It’s important to make good relationships in the foreclosure cleaning business. It might be wise to work alongside trusted professionals with longstanding relationships first.

That way you can learn how to work and gain some experience on different properties before branching out on your own.

That would also get your foot in the door with real estate agents, contractors, buyers, and banks. You need to know these people in order to land contracts. Especially real estate agents, who work with the banks.


The Bottom Line

Foreclosure cleanup businesses are in excellent shape at the moment. They will probably be for some time to come. When the economy takes a turn for the worse, people lose houses. Of course that’s not what we hope for. But when these things happen, it’s good to know you have a business that will survive, and even thrive. 

Obtaining all the necessary permits and licenses can be tedious and require a lot of patience. No one enjoys going through government bureaucracy, but if you get started now, then you can have your own foreclosure cleanup business in no time!

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