There are a lot of things to consider when buying property. It is important to fully consider the different factors & inspect the property, leaving no stone unturned. That way you can avoid unnecessary surprises and unpleasantries after the deal is signed and done.
While some aspects are covered at the time of the title check and inspection, a diligent buyer should try to look into the property and its owner themselves.
As for most, purchasing real estate is a serious step to take in life. As such there are many aspects that are important to look into to guarantee that a property is a good investment. This is beyond just the physical property itself. A quick check can make a big difference in profitability.
Understand Your Budget
It is easy to get lost when looking for a new property without a firm plan and clear budget in place. It is easy to get distracted by over-the-top properties and mansions at times. Looking at homes with tennis courts, home gyms, and huge swimming pools can be fun.
This can be a massive distraction when searching for a home. However, if it is outside of your budget, then it should be avoided. Looking at extravagant properties will possibly make you feel a bit disappointed when you realize it is out of reach.
The best thing to do is come up with a financial plan prior to looking into houses or apartments. That way the search for a property will be much quicker and more focused.
Mortgage Pre-Approval
When browsing for properties, it is smart to apply for a mortgage pre approval first. Receiving a pre-approval letter is usually a quick process, generally taking 1-2 business days. With pre-approval, you can understand the outlines of the amount you may borrow.
It will help you make sure that the rates of the mortgage, its scope, and terms are acceptable. This can assist you with fully understanding your budget when purchasing a property with a mortgage.
In addition to all the above, having a pre-approval letter will speed up the process and make you seem like a more serious buyer.
Using A Realtor
Using a professional realtor is highly recommended. Some may opt-out to reduce closing costs at the time of purchase, but generally, this is not a good idea. Having a realtor means that a qualified real estate expert is looking out for your best interests. They can help make sure that you are buying a good property that will be profitable in the future.
Property Management
When purchasing a property for investment purposes, such as buy-to-rent, having a skilled property manager is important. Essentially a property manager is your “boots on the ground” so to say.
They are important to not just find a tenant, but also in doing the proper due diligence on the prospective renter. That way you can rest assured that monthly rent will be covered and that it is around the market average. Additionally, they will assist with any issue that may arise if you are not geographically close to the property.
Neighborhood
There is an old real estate saying: “It’s better to live in the worst house in the best neighborhood, than the best house in the worst neighborhood.”
While this saying is probably not 100% correct, a look into the surrounding neighborhood seems like a good idea. Making sure that the property is in an area that has relatively low crime and quality residents is always a step in the right direction. Close proximity to a downtown area should also be considered.
Looking into the neighborhood usually shows if real estate prices are rising or falling in a certain area. Also, be sure to check if there are any other developments in the area such as highways.
Additionally, alarms should go off if the surrounding properties are rundown or derelict. Their problems can quickly become yours.
School District
The quality of local public schools is a big factor for many families and could impact the value of a property. Even those without children or investors planning on buying a rental property should look into this. Even amazing properties can be affected if the local school board is considered sub-par.
A brief look into the local public school system is highly recommended when buying property.
Condition of Roof & Windows
When purchasing a single-family home, give the roof a peek. While this is usually also done by an inspector close to the closing date, a diligent prospective buyer should also look into the condition of the roof. Try to look for any missing tiles or shingles and the condition of the gutters. If there are any issues, make note of them and consider possibly buying a different property.
Checking window frames is also highly recommended. They tend to be a great indicator of the house’s general condition. Make sure that the windows open easily, that the frame is in good condition and that there is no condensation in case of double glazed windows. These issues if spotted could indicate faulty installation or foundation issues.
Both roofing and windows tend to be costly to repair, so be sure to check them out!
Structural Security & Water Damage
While small cosmetic details such as the interior wallpaper or strange paint job isn’t a big deal, structural security is. Always be sure to look for cracks and gaps when looking at a property.
Making sure that the floor is even is also important. If you can, take a level tool or marble with you when viewing a property. If the marble rolls to one end, make sure that a more in-depth inspection checks the issue.
Be sure to check the insulation in the home, especially if it is an older property. Old types of insulation may contain asbestos, which will need to be replaced.
Having a property near a water source, like a river or lake can be picturesque and charming but can lead to issues. Homes located near a water source may require special insurance covering flooding.
Also, be sure to check for any existing water damage in the property. Usually, this is noticeable as dark spots on the ceiling, walls, or floors. Another telltale sign is bubbled or peeling paint. This could cause mold and mildew as well as a bad smell on the property. Additionally, check any exposed pipes for signs of rust or leaks.
Yards
If you’re purchasing a single-family home, usually it comes with both a front and back yard. Make sure the size of the yard suits your needs. Yards that are too small may be unsuitable for families, and on the other hand, large yards may cause higher property taxes.
Finding the right balance in relation to the size of the property seems best.
Owner Background Check
While a title check will guarantee that the property is owned by the right person, a look into that person may be wise. A brief search on Google regarding the owner or previous tenant may be a clever choice and should suffice. This can help guarantee that the owner isn’t a shady character and that nothing illegal took place on the property.
Start Owning an Investment Property!
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