Steps Before Making a Real Estate Purchase Offer

So, you're ready to make a real estate purchase offer on a rental property that, based on your numbers, meets your investment criteria. But hold your horses my friend - don't make an offer without first checking some important details that, in addition to the financial numbers, could affect your proposed investment.

Before making your offer, invest some extra time to get the complete feel for the property - it will allow you to make a better offer based on being more informed. Let's not forget, the tortoise will ultimately win the race!

Check the Neighborhood

Evaluate the condition of the neighborhood. If the property that you're considering is the only property in good condition, then that’s a sure sign that the neighborhood is spiraling downward. In all likelihood, there's a high-risk that if you purchase the property, then it too will fall into a state of disrepair over time.

Also, inquire about employment in the area and crime rates. This information will provide a good indication of the neighborhood's direction and the quality of tenants living in the area. And ask yourself whether or not you'll be comfortable having the types of people who live in the neighborhood as potential tenants.

Zoning and Size of Property

Before making a real estate purchase offer, verify that the property is zoned for its intended use, such as residential multi-family. Also, check that the property is zoned for the total number of units that are being represented by the seller or seller's agent. This can be done at the local or municipal town hall where the property is located.

In addition, make sure that the actual size (square footage) of both land and building coincide with the dimensions being furnished by the owner. This will verify that you'll be getting the actual amount of property that you'll be paying for with your hard-earned cash.

Age and Condition of Building

For a building that has not been upgraded and maintained over the years, age is certainly a factor that will impact your future cash flow. Money will have to be invested to make the building safe and bring it up to code. Old wiring, lead paint issues, wood rot, bad plumbing etc., can all become major costs to fix. On the other hand, if the building has been well maintained and upgraded over the years, then its age will not be such a major concern.

For more in-depth information about making a real estate purchase offer, please visit The Landlord's Library book collection. It's a terrific, one-stop source for practical, in-depth information on the entire subject of residential landlording.

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