Finding a bargain investment property on paper is only half of the process of property investment. The other half of real estate investing is to examine physically for defects in the construction and legal title. . You do not want to spend lots of legal costs later to undo the bad lemon you bought into. This article will highlight five possible things to consider when searching for your next investment property.
Unless you find a property that is really destroyed, you want properties that might have electrical and water piping problems. The reason why this is critical is that wiring and water piping is usually hidden behind walls. Repairing them can be a very costly. If you are new to property investing try to bring a expert with you when you are doing the inspection.
Foundation problems are usually harder to spot. When walking around the property, look for cracks appearing at the side of the house and the foundation . Look for unusual holes found at the side of the property and cracks on the exterior paint of the building. Bring a civil engineer to figure out how much it would cost to fix the property if repairs are necessary.
Roofing problems can be a persistent nightmare to you and your potential tenant if you are purchasing the real estate for tenancy purposes. When inspecting the house, look around the ceiling near the windows and around the edges of the walls to look for new paint or yellow spots or cracks with water in them. Most sellers would be smart enough to eliminate the water bubbles after a heavy rain when trying to sell the property, but it is always important to figure out if there is a major leaking roof which might cost you are lot into repairing it. Use this defect to negotiate the price of the property further if you are interested in the property.
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Another reason why the investment property in question might be a bargain might be because there are legal problems associated with it. Common ones include, multiple owners that cannot agree whether to sell or not. Litigation here would be futile and you should avoid such property once you learn about it.
Another problem might be a lack of clean title. Did you know that the seller can be selling you only the building without the land or maybe there are existing tax liens on your property or some other liens that can prevent you from getting good title to the property? Spending some time chatting with a reliable real estate attorney to learn about common real estate problems in your area can save you lots of legal problems later.