Tips for Buying Rental Property

Real estate is in the news. There are homes for sale, low interest rates and potential renters everywhere. It may be a good time to look into purchasing investment property. There are a few things to keep in mind while looking at property for sale. A handy way to remember some key ideas can be found in the “three S’s”. Tom suggests considering 1. Site 2. Services and 3. Structure.

Site:
Take a look at the home, condominium or apartment building from the outside. Is the concrete curb and gutter in good shape? Does the driveway need to be repaired? What does the existing landscaping look like? Are there problem trees and/or shrubs that may need to be removed? Is the overall neighborhood a good area? It is important to look at nearby amenities like schools, shopping and public transportation hubs. Also, look at the neighbors adjacent to the potential property. Are there vacant homes or buildings? Are the yards and structures in good condition?

Services:
Another area to closely examine is the public services that fuel the home. How does the water come into the house? Examine the piping in the house and out to the city line. Is the pipe made of copper, pex or is it galvanized? Sewer services will usually be cast iron or clay. Is the servicing sewer line buried underneath the neighbors lawn. If there is a break or a repair needed this could become extremely costly. How does the electric line enter the property? Many older structures electrical panels are an insufficient size. Also, know where gas lines are. What are the phone and television options?

Structure:
It is important to give close attention to the structure of the unit. Take time to examine the foundation. Check for cracking, water stains, flaking and settling. It is a good idea to be familiar with the type of soil the structure sits on as well. Look for cracked walls as well. Do the doors and windows close easily? Where is the furnace and hot water heater located? Is the floor even or are there obvious variations?

A rental property can be a great investment. Just ask a few questions before purchasing.