SmartCapitalist.com

Looking at Investment Properties

Saturday, February 18, 2006
After you have surveyed the neighborhood and found a realtor, it is time to start looking at properties. Once you let your realtor know what you are looking for, they will probably be able to lead you to a few good prospects. You should also have a few properties you want to see in mind.

The best approach is to look at as many properties as you can. This will be useful because when searching in an area, you will benchmark each property against the ones you think will work out the best for you. The more you look at, the better this benchmark approach will work out statistically. For example, the realtor may take you to two bad properties, then a better deal on the first day. The two overpriced properties will look bad, however you have probably not had enough time to make a judgment call on whether the third is really a good property yet.

You will want to write all your thoughts about each property down on a notebook. This is because after about the 10th house you look at, you will probably need something to keep track of the advantages and disadvantages of them all. You should write down how many bedrooms are in each unit, what the condition of each unit is, etc. It is best if you are as descriptive as possible in your notes.

Not only are you looking at the over all condition of the property, but you are looking for things you can fix up. This is where it depends on your skill level as an investor, but if you can make improvements to the property, you essentially create equity based off of your time, or even a contractor’s if you can negotiate the price of the property down enough because of its shortcoming.