Tips for Shopping for an Investment Property
Real estate has long been known to be an outstanding investment, historically delivering solid returns to those homeowners willing to wait five or more years while, generally, providing those returns amid much less volatility than the stock market.
However, there is no denying that a bad real estate investment can turn into a money pit, with homeowners seeing any appreciation in the home’s value offset by maintenance and repair costs.
Therefore, if you are in the market for an investment property, be sure to consider the following tips before making your purchase, as they may help you save a boatload of money and frustration down the road.
Look into the Foundation and Framing
Strong foundation and framing are part and parcel of a quality home. Foundation and framing will directly affect everything from future renovations to future utility bills, so make sure you find out about the quality and construction of each of these essential elements before making any critical decisions on the property.
Consider that pretty homes with poor foundation and framing present downside risk, while “ugly” homes with a strong foundation and framing have huge potential. Namely, when looking at a home with a traditional wood frame construction, buyers can expect to pay higher utility bills, have a greater likelihood of having to perform repairs due to mold and insect damage, and are at more of a risk of losing their home in a tornado or similar severe weather event than with a similar home made from a concrete block construction.
If the realtor or previous owner are not able to answer your questions regarding foundation and framing in a satisfactory manner, look for the following red flags that may indicate that there are some serious underlying red flags with the home’s construction:
- Cracks or protruding bricks along the home’s exterior
- Zigzagging cracks along the walls
- Noticeable gaps where the wall is supposed to meet the ceiling or floor
- Doors that catch or do not latch properly
Check on the Dates of Kitchen Remodels
A common cliche in the real estate industry is “kitchens sell houses.” Like any cliche, though, the saying became popular because of its accuracy, so if you are on the hunt for an investment property, choosing one with a trendy kitchen is a great idea.
The following are a few of the most common features that buyers look for in contemporary kitchens:
- Open spaces that allow for heavy traffic and multifunctionality. Large islands and kitchen bars are generally preferable to traditional walls and tables
- Nonporous, low-maintenance countertops. If the current surfaces are stained or cracked, this is often one of the more simple kitchen projects to undertake, with a number of durable quartz counter colors available for installation in just a few days
- Energy-efficient appliances to help reduce nonrenewable energy consumption and keep the utility bill manageable
- Open shelves for china storage, as opposed to traditional cabinets
Prioritize Properties That Have Aging in Place Features
Simple economics teaches that when demand outstrips supply, prices subsequently run to a premium. Considering that record numbers of people are entering retirement age and are likely going to be looking to purchase their final home, those shopping for an investment property would be wise to keep this demographic in mind.
Aging in place refers to the process of staying comfortable and enjoying full functionality in your home as you grow old with it. Some key aging in place feature include:
- Remote control lights to limit the amount of time back-and-forth between the switch
- Customizable handrails, as opposed to a more generic Lowes stair handrail, along the stairs, in the bathroom, and/or in the kitchen to aid in walking, crouching, and rising
- Easy to use blinds to give residents a sense of security at night
- Shower seats to help prevent slipping during cleaning
Matt Lee is the owner of the Innovative Building Materials blog and a content writer for the building materials industry. He is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that save money, improve energy efficiency, and increase property value.