When I first started down this journey of becoming a real estate investor it was non-intentional and maybe for that reason alone it has allowed me to really consider properties from the perspective of both sides: being an owner and a renter. I toured many homes, asked a ton of questions and conducted much research to determine the true value or overall cost I would be faced with when purchasing a property for investment.
Here are the top items you should consider when shopping:
What is the home's current market value and as it relates the area?
You might already know this is key but a different reason to really study this is to understand if you would have any flexibility to increase the market value after making home improvements. Because, there is no home on the market that doesn't require updates unless you have an extremely high purchasing power and even so, there's no guarantee that after paying top dollar for a property you still won't be faced with additional problems.
2. When did the property last have home improvements?
Something to note is if there are potential problematic areas within the home that may have to be addressed frequently, i.e. duty to a flooding basement, shift in home's foundation, abundance of trees or roots that are very close to the foundation of the home. These are all, while looks small are quite significant and could potentially cost you inconvenience and additional money you hadn't accounted for.
3. Everything is negotiable
If a property looks attractive, you want to spend as less as possible to obtain that property. Always consider the interior and exterior of the home when analyzing what requires attention or needs updating. With your inspector, they will ultimately inform you of any glaring issues they found. That is the time when you want to use that as your pitch to negotiate a lower cost towards the home. Remember you can always negotiate who covers closing cost or other expenses, but unless you ask, of course, you could be missing out on those savings, so never be afraid to speak up and ask. You never know, the buyer could be willing to oblige depending on their urgency to sell the home.