I ran across an interesting article today on allbusiness.com on developing a checklist to go through when considering purchasing a rental property. The first item on their list was to examine the condition on the home. Unless you are a seasoned and licensed general contractor, it probably makes a whole lot of sense to have the property examined from the foundation up to the roof by a certified building inspector. They can help you determine which items need work. Then, you can get some estimates so you have a better idea of any necessary repairs and how you may negotiate these repairs into your offer price.
The next item on their rental property checklist was to evaluate the location of the property. It may not matter if you have the nicest home on the block if no one wants to live in your neighborhood. Walk the areas surrounding the home and speak with people who live in the community so that you can get a feel for the vibe of the area.
Another item on the list was to find out if the property had been used as a rental in the past. If past tenants were nightmare neighbors, you may have a more difficult time finding people in the community to move into a home that was last occupied by chain smoking, potty mouth hoodlums.
They also bring up some interesting questions to examine such as:
Can you handle the needs of the property or will you need to hire a property manager?
Are there tenants in the property? If so, what are your state laws regarding honoring lease agreements and adjusting rents?
Having answered these types of questions and examined your investment property financing options, you can proceed with a better sense of confidence. Best of luck.
You can find the article at: allbusiness.com/personal-finance/investing-real-estate-investments/4063-1.html
Below is a video discussing the role of a property manager.