On the market to buy a home for rental purposes? How about house flipping or renovating fixer-uppers? Whatever your intention is, buying a home is and remains a financial decision.
That means you have to find more than a sweet spot for you to consider the transaction a good buy. How can you spot a gem in the neighborhood? Landing a good real estate deal is doing your homework and more.
You begin by searching for a home with good value.
Look At and beyond the Pictures
You can quickly look up properties for sale online. Some of these homes are showcased in HD-quality photos—don’t fall in love right away and schedule a visit. In the same way, listings with no pictures online can imply many things about their actual condition (curb appeal or none) or the intent of the seller (quick sale) or agent (rushed posting). So always contact the listing agent.
Compare Selling Price versus Assessed Value
Try to look up the address of a prospect property on its local district or area’s database of property assessments. If its selling price is set below the assessed value on the database, then you can earn profit from the purchase. You can also look up homes on MLS for an overview of the prevailing market prices of homes in the neighborhood or ask details from the real estate agent.
Pay for Location
Generally, you pay a premium for location, whether these properties are in business districts or expensive real estate markets, as they can yield higher returns on investment. You may be able to do so if you’ve been paying rent high enough to cover monthly mortgage payments (property taxes included). You can use online mortgage calculators to crunch the numbers.
Play by the Rules
Many rules abound the real estate playbook. The 1 percent rule, for instance, contemplates that, if you were to buy to an investment property, the rent should represent 1 percent of the sales price, according to Forbes. As noted in the above point, you have to know the market you are buying into to help you with the home-buying decision.
Buy Clear and Free of Liens
Liens are claims levied against the property. Be wary of these encumbrances as they can complicate the sale (e.g., the transfer of the title to your name pending the settlement of these existing financial obligations). Before you buy a lot or a house, always run a property lien check.
Go Over the Physical Aspects of the House
The Roofline
Simply put, this term refers to the shape or profile of the roof. The roofline affects the design of the house and, more importantly, its sturdiness or resistance to the elements. You can bring along a professional who can look into the roofline of properties you have been eyeing.
The Foundation
You can’t inspect the property without looking at the foundation. Cracks are red flags as repairs can be expensive. Early detection means saving yourself major headaches later on. Check for any foundation issues and whether they can be mitigated and worth the trouble later on.
The Bathroom
It is a critical aspect of a property or an open house event. House sellers anticipate this inspection and thus make touch-ups to the bathroom. Inspect caulking, tiling, and piping. You can visualize how you can improve the area with upflush systems from Saniflo toilets. You can also look into installing this toilet system in the basement too.
The Kitchen
This room goes in tandem with the bathroom in terms of importance. Check the functionality of the kitchen, where you prepare meals and entertain guests. Also, look into how this space connects with other areas of the home. Open the cabinets for their condition and storage space.
Buying real estate can be a lucrative venture; you can rent out the property or flip it for a profit. To land a good deal, put in due diligence and legwork and consult the right people.
Thank you,
Glenda, Charlie and David Cates
