Things Overlooked When Looking for an Investment Property
After being quarantined for some time I’m finally able to ease back into work, and this month I’m focusing on finding a new investment property.
As I begin my search for a new property, I’ll be breaking down the ins and outs of what to look for in a GOOD investment.
I know you may always hear never judge a book by its cover, but when looking for real estate that’s not always a bad idea. Believe it or not a glance of the outside can reveal a lot about the property and the neighborhood.
Typically, I try to purchase a property that has more homeowners than renters on the block. I can tell the difference between the two from how the outside of the homes are taken care of. Homeowners tend to maintain their properties better because it helps them maintain and/or increase the value of their homes.
You can also tell a lot about the block based on the way they set their trash out on trash day. If garbage is all over the street, that is a red flag.
If a block passes my “visual” test, I will then begin to speak to the neighbors just to learn more about the neighborhood. See if there is a Block Captain, that is always a good sign. The block captain can give you the inside scoop on the neighborhood – this can also give you a sense if purchasing that property would be a good investment or not.
As I scout the neighborhood, I also pay attention to see if there is any new construction going on in, whether commercial or residential – doing this gives me insight if the area is up and coming. An up and coming area typically means that the property value of homes in that community will be increasing. These are the neighborhoods I like to invest in.
If you plan on using this potential new property as a rental I recommend seeing if there are any bus stops or train stations within walking distance. You also want to ensure that there are essential shops around within a reasonable distance. These few things can increase your odds of finding tenants to occupy your property.
Lastly, you want to ensure that neighboring properties have proper gutters and downspouts installed. If they don’t please know that could potentially cause damage to your property in the future. You also want to check the roof to make sure there are no damages. If you’re looking at a row home, you should check out the neighbor’s roof as well. If their roof has damages that are not being taken care of that could cause damage to your property in the future as well. The goal here is to make sure that someone else's negligence does not affect your investment.
A good investment is more than just those initials numbers when you sign a new deal. It’s about doing your due diligence to ensure that there are the least amount of expenses for that property as time progresses. In my experience, a lot of investors have had to spend more money fixing damages that were out of their control. That’s why I tell you to look at the neighbor’s properties before even walking into your next potential investment.
Stay tuned for the next article I’ll be going over all the things to look for once you make it in the property!