Getting into real estate as an investor or a landlord can be a trying time. There are hundreds of risks that you will have to weave through and balance out while you make your way through the market.
One of the biggest risks that will put the most pressure on you is choosing a property to invest in.
Getting the right property can lead to huge amounts of future success. Getting the wrong one can cause you to lose more money and mental energy than you even want to think about.
Even if you aren’t looking for an investment property and just want a nice home to live in, you don’t want to end up in an endless fixer-upper.
There are ways that you can protect yourself from ending up with a money-sucking, dead-end property. Never buy a property without checking these 4 things!
#1: Slopes Are a “Nope”
Whether a home is old or new, there is a chance that it is not as structurally sound as it may seem to be. Structural issues are more likely in old homes than in new ones, but you should keep your eyes open for any type of issues no matter what.
There are a number of things that you should look for when viewing a home:
- Big cracks
- Sloped floors
- Cracking door frames
- Bows around window frames
- Leaning walls (indoor or outdoor)
It is possible to see the biggest structure problems yourself even if you don’t have much experience. If you are worried about a specific property but unsure of how to discover the issues, you can hire a professional surveyor.
With their help, you will be in the know about whether or not the home has major structural issues that will need to be addressed or not.
#2: Research The Plumbing & Sewage
Every property has a different type of sewage system.
Older homes in some areas may have a septic tank. Others may be hooked up to the town’s sewage lines with old and failing pipes. The plumbing system, too, should be inspected for foul-smelling mold or mildew.
When you’re thinking about buying a property, it’s important that you research what type of plumbing and sewage system is in place and when it was last serviced.
If the current owner does not have this information available, try to contact the township and see if there are any problems or work orders on record.
You want to become well acquainted with this information so that you are not surprised by a large problem or different system than expected.
One easy way to check on the plumbing or sewage system when touring a home is to flush the toilet and turn on any sinks. After running them, sniff around the pipes and fixtures!
You should be trying to see if you can smell anything bad or sour smelling. If you notice the smell of sewage, eggs, or just anything bad, that may be a sign of a bigger problem.
If there is a smell, that does not automatically mean you cannot invest in the property. Consider what the costs of a repair might be or have a more thorough inspection done on the property before you buy it.
#3: Windows & Roofs
Windows and roofs can both be replaced on a property, but there’s no reason to invest in a house that needs all new windows and an entirely new roof if the price is too high.
High-quality windows and a new roof are going to cost thousands of dollars, so you need to be prepared for that cost.
Checking out windows is a great way to know how much care the previous homeowners had put into their property.
Try the following as a quick way to know if they’re in good condition or not:
- Try to push your finger into the wood around the external part of the window. If it goes in easily, the windows are rotted.
- Check if there is condensation between double-paned windows. If there is, this means that the seal is broken, and the windows are not going to be very efficient.
- Look for any cracks, tape, or other signs of temporary repair.
- Find out if the windows were installed by a certified installer or if they have any certificates for efficiency.
As for roofs, ask when it was last replaced. Make sure to look up at ceilings inside for any signs of leaks or staining, and notice if the shingles on the outside seem to be in good shape or not.
Buying a home that needs windows or roofs replaced isn’t a bad thing, but you do have to budget appropriately when doing so. Checking these things before buying will help you make a more reasonable offer and still keep you in budget down the line.
If You Plan On Renting…
If you’re hoping to rent out this property, getting energy efficient windows and a new roof to keep costs down is a must.
The best tenants who will make your life as a landlord easier will care about efficiency in the home, so you want to be able to attract them to your property by improving these parts.
#4: Don’t Budge On Deal Breakers
When you’re looking for a house, choose some deal breakers in advance that you will not be willing to compromise on. Many things can be changed in a home, but it’s OK to have some limits to what you are willing to give up on.
Do you absolutely need four bedrooms? Sure, an addition could be added to a 3-bedroom house, but that would likely be more work than you want to undertake.
Make a list of possible deal breakers while you are house hunting:
- Number of bedrooms
- Size of yard
- School district
- Available storage space
Every property has some unchangeable aspects. If you don’t check on these things before you purchase a home, you’re sure to have some regrets.
Find The Right House
Whether you are hunting for a house for yourself or for investment purposes, you need to be sure that you choose the right house when it comes to the most important aspects.
Don’t compromise on the things that will matter most to your happiness or to your businesses success, and you’ll end up with a great property under your control.
About The Author
Sabine Ghali is Director at Buttonwood Property Management, a property management company in Toronto. Buttonwood offers both residential & commercial property management services and endeavors to help investors create real estate wealth over time in the Greater Toronto Area.