Are you hunting for an investment rental property at a price you can afford? Finding a solid investment hinges on a number of basic factors, including a little digging by the hunter. Most of the leads will come from the classified ads in a local newspaper, metropolitan daily, or neighborhood weekly. Check the listings of local brokers as well.
Do ''windshield research'' whenever possible. Drive around neighborhoods to see what's going on and observe the people who frequent the area. After all, they could end up as your neighbors.
Watch for empty-looking houses with vacant windows. These are clues to available properties that are not yet listed on the market.
Also, there are financial savings if a house can be bought directly from the owner. This way the brokers and salespeople are bypassed - and so are the commissions they would have received.
If you come across an ''open house'' or ''for sale'' sign, look, visit, and examine the property, even though it might not be in your classification because of size or price.
The more you see, the better informed you are as you continue your search.
In older houses, you'll soon learn to detect telltale signs of needed repairs by simply looking at the outside. Check for cracked windows, rotted sills, drains not embedded in the ground, water marks from leaking roofs, and mortar decay between bricks. You can avoid great expense by developing a good eye in determining what improvements are required when you're considering a purchase.
Comparison is another valuable teacher. After seeing many old properties, look at new ones. Concentrate on one item at a time. Consider, for instance, how the windows fit, how a building sits on its base (footing), and whether the doors are plumb.
Make mental notes on the construction of mailboxes. The front entrance can tell a lot about a building inside.
When you buy property you must abide by one important rule: The structure itself should be sound. Does the building lean? Are the bricks waterlogged or pulverized? Has the siding fallen victim to dry rot?
Flaws that make remodeling costs prohibitive can be detected in a surface examination. It's not necessary for you to have a professional's knowledge of construction. But if you're serious about a building after a thorough inside and outside inspection, and if you have any doubts about a building's soundness, it's advisable to seek the help of a professional.
In looking for a rental property to buy, it's best to start your investment portfolio small, although too small at the beginning can be hazardous. If you're renting out a one-family house and you have a vacancy, you're out of business. Your best initiation into real estate is with a two- or three-apartment building. With a small number of units, it's easier to learn how to deal with improvements and remodeling.
Management of a small building is not difficult. The income from the rents should cover the mortgage payments, expenses, and accounting advice. You might even make a small profit, which, added to your satisfaction with a job well done , will lead you to bigger deals in the future.
Stay away from buying a two-apartment house with the intention of living there yourself rent-free. The income of the rental apartment never covers all the expenses: mortgage, taxes, and upkeep. The result can be shoddy upkeep, insufficient improvements, and all-around dissatisfaction with the project.
When inspecting a prospective property, establish a mental image of what it should look like, given the time and money required to see it through. If it meets your qualifications, go on to the next step. Don't dwell on what is, but on what will be.