Finding a deal investment property on paper is only half of the procedure of property investment. The other half of real estate investing is heading down to the property to examine the real estate investment property physically for faults either in terms of the construction and legal identification and other liens that can be on the property.
You do not want to spend lots of legal costs thereafter to undo the bad lemon you bought into. This article will highlight five potential things to consider when searching for your next investment property.
Investment Property
Firstly, unless you find a property that is really run down and you want to tear it down to its bases, you want to look out for properties that might have potential electrical and water piping situations. The reason why this is critical is that wiring and water piping are usually hidden behind walls and other furniture fixtures and repairing them can be a very costly experience since you have to hack into the walls and run the piping and wiring if the problem is very deep. If you are new to property investing try to bring an electrical engineer along with you when you are doing some property assessment.
Secondly, foundation problems are normally harder to spot. When walking around the property, look for cracks arising at the side of the house and the foundation that goes into the ground. Look for large uncommon holes found at the side of the property and cracks on the exterior paint of the building. You might like to bring a civil engineer and a contractor along to figure out how much it would cost to fix the property if you suppose the repairs involved will be substantial. You can also fetch them along to give a “grim estimate” to the house owner and bring down the cost of the property.
Thirdly, roofing issues can be a persistent nightmare for you and your potential resident if you are purchasing the real estate for residence purposes. When inspecting the house, look around the ceiling near the windows and around the boundaries of the walls to look for new paint or yellow spots or cracks with water in them. Most sellers would be smart enough to eradicate the water bubbles after heavy rain when trying to sell the property, but it is always important to figure out if there is a significant leaking roof that might cost you a lot into repairing. Use this shortcoming to negotiate the price of the property additionally if you are interested in the property.
Fourthly, another reason why the investment property in query might be a bargain might be because there are legal issues associated with it. Common ones include multiple owners that cannot agree on whether to sell or not. Litigation here would be ineffective and you should avoid such property once you learn about it.
Another problem might be a lack of clear identification. Did you know that the seller can be selling you only the structure without the land or maybe there are existing tax liens on your property or some other liens that can prevent you from getting a good title to the property? Spending some time chatting with a trustworthy real estate attorney to learn about common real estate problems in your area can save you lots of legal situations later.
Also Read: Have You Made A Bad fund Investment?
Fifthly, the bankruptcy of your seller or one of the part owners of your real estate may depend on the legal proceedings of your state and affect your proficiency to transfer title quickly. Most states make it a requirement that the receiver of the bankruptcy has to agree so pay careful awareness to the bankruptcy legislation of your state. That being said, sometimes the banks are willing to sell you at a bargain so as to recover the bad debts fast so do your homework before purchasing such an investment property.
Conclusion
In conclusion, these five facts can be used as a starting point for you to evaluate your property investment. Spend some time to consider rationally the properties that you have seen and see if they have any of the above flaws and consider if you want to continue purchasing them and whether the costs that you may incur in setting them will justify the discount of the property to the market value. Above all, take huge action today and pursue your property investment dreams.