#1 M A R K E T R E N T. If you are looking for a rental property- researching the market rent for your area is extremely important. You want to make sure the market rent that you could receive will cover your mortgage (and then some). Check with your local housing authority or check home rental sites to see current rental rates for your area.
#2 N E I G H B O R H O O D. If you are going to live there or if you are going to try to convince someone to live there, you really want to be able to get a good feel for the neighborhood. I highly suggest you stalk the place. Yes, stalk! Go visit it on different days at different times and just sit and observe for a while. Don’t just go on Sundays at 3pm. Go in the middle of the week, go late at night, you will be amazed how much you can learn about the neighborhood from just sitting and observing.
#3 N E I G H B O R S. Our very first home purchase was almost a condo. ALMOST. We were under contract and everything. It was a condo in a building that had not been built yet so we went to the site one day to make some final decisions on what tile we wanted. We were walking back to our car and saw a guy walking out of one of the buildings that was already finished. We asked him what he thought about the place and if he liked living there. He said the walls were so thin he wished he’d never bought the place. Yikes. Thankfully there was a clause in our contract that allowed us to cancel it within 15 days. We talked to that neighbor on day 14. Yep. We cut it really close. And we learned to never ever make that mistake again. Now we always talk to the neighbors before sealing the deal. Always. You would be surprised how willing people are to tell you about the neighborhood, why the house is being sold, and more. If you see a neighbor out and about while you are stalking the place, tell them you are interested in buying the place and want to know how they like living in the area.
#4 F U T U R E P L A N S. When scouting out a property, research future plans for the neighborhood and surrounding area. Go to the Office of Planning website for your city or attend city planning meetings.
#5 R E P A I R S. Another thing we look at when scouting out a potential property is how much work it needs and if we can afford it. When buying rental property make sure you factor in how much money you would need to make repairs to make the place livable and attractive to renters. Also think about the time those repairs would take and how that would affect your monthly cash flow for the property. Not sure of the numbers or timing? Call a professional and get an estimate. Send them photos or if you have a relationship with them already, see if they will meet you for a walk through of the property before you buy.
Want more tips? Sign up for The Key Resource E-mail List and get tips just like these delivered straight to your inbox.
