When purchasing a property, an investor must carefully examine it first before closing the deal. One of the most common mistakes that an investor could make is impulse buying because it leaves no room for in-depth evaluation, inspection, and quantitative analysis. It would be frustrating to discover hidden issues after already purchasing the property.
A low price often clouds an investor’s decision-making process. However, no matter how attractive the price tag of a property may be, it is always better to take a step back and check for tradeoffs. If it’s too good to be true, it must be.
No property is perfect. There’s always “a catch.” If it’s too cheap, there’s bound to be hidden issues. If it’s too perfect, it comes with a hefty price tag. Whenever purchasing a property, an investor should be able to tolerate “the catch.”
When a property that needs repairs gets put on the market for a low price, real estate investors (e.g., landlords) would see it as an opportunity. They will purchase it, pay for repairs, and have it rented out. That is a good plan. However, the investor must know what actual damages require repair first because it would be crucial for their plan’s success.
What seems like a diamond in a rough could eventually be a big lump of coal. If a property for sale only requires repairs that the investor can afford, it might be worth it. But if he overlooks serious damages that he can’t afford to repair, he might end up losing more than what he had hoped to gain.
Here are some costly maintenance hazards that an investor must check before purchasing a property. It would be worth hiring a third-party expert to give an unbiased evaluation.
It does not matter if it is a basement or slab. The investor must make sure that the structure has a stable foundation. Repairing a foundation in terrible shape can kill profit.
Check for cracks on the exterior walls; check for water damage on the surrounding ground; keep an eye for shifting or broken chips and blocks. Those may signal an underlying issue with the foundation of the structure.
The basement may also reveal problems with the foundation. Signs of water infiltration in the interior of the basement walls are a red flag. Staining on the walls, worn-out grout, and mechanicals damaged by water are tell-tale signs of a damaged foundation.
One of the most commonly overlooked maintenance hazards is roof damage because it requires a closer inspection to spot. Repairing roofs can cost a hefty amount along the road, which could eat up a humungous chunk of rent income.
Inspect shingles, gutters, and every nook and cranny over the roof. It would require a lot of effort, but it will be worth the peace of mind from knowing that there are no weak spots or aged materials that may lead to damage in the future.
An expert must be able to tell you the age of the roof. Ideally, it must be less than ten years old and has remained in good condition.
Check the electric panel and make sure that the house has a minimum of 100 amps, because less than that would not be able to handle all the electronics that tenants might have. The tech-savvy generation acquires more and more gadgets these days. Making sure that the electric system can keep up will decrease the likelihood of electrical failure or fire.
The furnace must at least be 80% sufficient. Carefully examining the furnace for any damage must be done. Furnace repairs are not only costly but can also cause inconvenience to tenants.
When buying a property to have it rented, an investor’s primary goal is to make sure that he would be able to make it livable and attractive to tenants.
One’s it is ready, then that is when he needs to start worrying about looking for tenants. It’s a good thing that rental agents can now utilize property listing platforms like Padleads. Looking for leads is made easier because a Padleads listing can easily be syndicated to different websites for more tenants to see.