We left off in our last discussion, that we were at the point of viewing a property, that we deemed to be profitable on paper, according to our initial findings.
Our next step now is to view the property and determine the amount needed to fix or remodel the home and have it ready for the market price we determined on our initial findings.
Their are several main things we look for first off. These things are as such.
1. Condition and age of roof
We wont always know the age of a roof. This is where a roofing contractor can aid you in a good educated guess. If the roof isn’t leaking at the current time and it appears to be in decent condition, then it probably is. If the roof is not leaking, but looks very worn, or if shingles are missing here and there, you need to figure in for a new roof. Most mortgage companies ask for a roof certificate before they will mortgage the house, so make sure the roof is in good condition.
2. Electrical and Plumbing
Some of the main things here are simple enough for anyone to look for. For the electrical, look to see if the main panel box is a breaker box. If it is fuses, then it will need replaced. Check the wiring and make sure it isn’t single conductor knob and tube. Check throughout the house for grounded receptacles. If the receptacles aren’t grounded, chances are there is no ground being run in the circuits. While it isn’t absolutely necessary to have wiring with no ground replaced, it would add value to the home to have it changed.
For plumbing, look for lead and galvanized pipe. If there is , it needs to be replaced. Look at fittings, connections and shut-offs. If there is like a green acid looking substance on these connections, there is leakage. If the house is inspected before a purchase, an inspector will certainly catch this. One more point of interest. Check to see if the main drain pipe is cast iron. On older homes, especially if the house has sat over the winter with no heat, this cast iron pipe will crack. Look very carefully. In places you cant see, run your hand around the back of the pipe.
3. Look for termite damage
If your not familiar with what termite damage is, I suggest you find a termite inspection company to check for you. Do not hire a company that actually does exterminations. These companies have a tendency to over exaggerate things. Your real estate agent should be able to recommend one to you.
4. Look for past water or fire damage
Look for stains that would determine past water leaks. Most people, that have leaks fixed, decide to cover things up instead of fixing the damage. There maybe more damage than you can physically see. Also look for any signs that water is coming into the basement. Look for any black charing from a past fire, especially the attic and basement.
5. Look for rotted wood or mortar
Look for rotten wood near the ground surface and under enclosed spaces like a porch. Also look for rotted wood at the ends of the floor beams in the basement, especially where they sit on the foundation wall.
Look for loose or deteriorating mortar, especially around brick pillars that hold up a roof or a second floor porch.
6. Kitchen and Bathroom
There are two main rooms that can sell a house. These two rooms can mean the difference between a sale or a flop. You want these rooms to “wow” the buyer. Kitchens, you are looking for updated cabinetry and counter tops, nice looking sink and fixtures, refrigerator, stove and range hood and an attractive flooring layout.
Bathrooms, size is the name of the game. You don’t want tight places in a bathroom. People look for a clean attractive place to wash and bathe. Many houses I have purchased, I have expanded the bathroom into the smaller bedroom beside it. Its very refreshing when a potential buyer walks into a bathroom and says “wow”.
7. Foundation
Look for any cracks or loose mortar in the foundation wall. If there is evidence that there is water leakage into the basement, it could be a sign of a water damaged foundation wall.
8. Heating/Cooling systems
In many cases, foreclosure homes do not have the utilities turned on, so these things can be hard to check. Always assume a property needs a hot water heater unless it looks very new. If the furnace is old or its converted, assume it needs a new furnace. On cooling systems, always assume it needs freon in the best case scenario.
Most everything else in the property is cosmetic. Windows are one thing that can stand out. If a property does not have replacement windows, you want to make sure that it at least has storm windows. Otherwise, figure on new windows were needed. The front of a house especially needs to look good, so you may consider replacement windows in the front of the house as a minimum. Things like fixing walls, doors, trim, painting and floor coverings are a given in almost every home. New lighting or ceiling fans can also set off some nice touches. In the spring and summer months, there should be a good focus on grass and flowers outside around the house.
Things like a large yard, garage, porch or patio are nice extras to any property. When you look at a property, you need to ask yourself what it is about the property that would make a potential buyer turn away?
You will never be able to attract all the buyers in the market , but your goal is to attract as many as possible.
Till next time…….
John
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Nice list on what to look out for before buying a property for investment.