You have a lead on a property but need to do some due diligence before you decide to proceed. Use this checklist to quickly screen investment property before you invest significant time and money.
1. Google Maps – Street View
Location makes all the difference in the world.
A good quality investment property needs to be in a quality location. If the location is in a solid neighborhood then you can ensure less vacancy, a higher caliber of tenant and better rental rates. Think long term. You want this property to be occupied and well taken care of.
To visually screen investment property go to Google Maps and take a look at the property with Street View. Is a motorcycle gang parked in front? Is there a bar next door? Basic safety questions need to be answered and Google Maps will give you your first snapshot of the area.
2. 10 block walk
The very best way to get active in real estate investing is to get out in the streets. It’s one of the best ways to research a market too.
During my recent interview on the Kyle Malnati show, Kyle referred to the concept as the “10 block walk.” When you walk 10 blocks in every direction from a property you’ll learn what is really going on in the neighborhood.
How is the area evolving? Would you walk the streets at night? Are there street lamps? Think about the kind of tenants you would like to attract and draw your conclusions.
3. Quick online market research
Before you even think about making an offer on a property you need to research the local market. Sperling’s Best Places is a great place to start. You’ll find statistics on: cost of living; crime rates; housing stats; employment & economy; population growth and other critical key metrics for identifying solid investment markets.
4. Police premise history
Call or visit the local police station in the area. Ask for a report on premise histories or service calls. This will give you a detailed look of how many times the police were called and what was addressed at the property.
My article The Police and Your Multifamily Property gives real examples of what you can discover with a police premise history report. You need this valuable insight to the history of a property before you invest.
5. Screen investment property records
Liens against the property and taxes owed are important to know before you take one more step. It’s also helpful to know the sales history of the property. You can easily check property records online or in person at your local assessor’s office.
You’ll find a history of the property and obtain recorded documents relating to the property via your local property clerk. The name of the office will vary by state. Search for: municipal clerk; town clerk; county clerk; county recorder; clerk & recorder; recorder of deeds; office of property records; assessor’s office and other variations.