If you are looking to invest in real estate, identifying the right investment property is key. However, even a seemingly great parcel of real estate may turn out to be a financial disaster if you are not careful. Look out for these ten red flags that you should beware in any investment property:
- Water stains or sagging ceilings
- Water damage can be a serious issue at the best of times, but recurring issues can become a major headache if not dealt with quickly. Water stains on the walls or ceiling, as well as a sagging ceiling, can be a sign of leaks or bad plumbing.
- Cracked foundations
- Any structure can degrade over time, even with proper maintenance, but you should be especially wary of any investment property with cracked foundations. This may indicate severe structural issues that could be very expensive to repair.
- The smell of mold or mildew
- If you smell a musty or earthy smell while examining an investment property, it is possible you may have detected the scent of mold. Even if the mold itself is not dangerous to your health, it can cause significant damage and result in the need for extensive repairs.
- Signs of insect infestation
- While you should obviously be wary if you see termites, cockroaches, or other insects scurrying about, these insect infestations will not always be obvious. Look for rotten or hole-filled wood, small piles of droppings, or hollow-sounding wood, which can indicate the presence of an infestation.
- Shoddy additions or renovations
- You should be very suspicious of any additions or renovations you see that look shoddily done, or which were a “DIY” project. While some homeowners have the expertise to perform such things themselves, most do not, and it is possible you may be buying an investment property that is not up to code.
- Old utilities
- While older boilers, water tanks and HVAC systems may be able to operate just fine, you should still be careful when buying a property with older utilities. They may be prone to breaking or close to the end of their service life, meaning you may need to get them replaced sooner rather than later.
- Scented candles or air fresheners
- If you go to check out a home and you find yourself overwhelmed by strong scents from candles, incense or air fresheners, you should be wary. They may be trying to mask unpleasant scents they can’t get rid of, like mold or pet urine, which may mean more issues you need to deal with.
- Neighborhoods with many “For Sale” signs
- Sometimes, the first sign of a bad investment property is not with the home itself, but instead with the homes around it. If you are in a neighborhood where it seems like everyone has a “For Sale” sign in their yard, it may be that you are in a bad market that is on the decline, limiting your investment prospects
- Properties no one else will buy
- On average, a property will stay on the market for about 68 days, or close to ten weeks. If you see a property that has been on the market for far longer than that, you may be dealing with a property with severe deficiencies.
- “For sale by owner” or “As-is” sales
- You should always be careful about buying a home from someone not represented by an agent, or who advertises a property to buy “as-is.” These properties are much more likely to have severe issues, scaring off potential agents or making renovations economically infeasible.
At Liongate Homebuyers, we assist our clients with a variety of services related to buying and selling real estate, including purchasing homes for cash. We have experience handling real estate financing, especially for developers and house flippers. If you are interested in selling your home for cash, please contact us at 516-548-6553, or visit our contact page.
