Real estate investing is an exciting business, to be sure. If we aren’t careful however, it can end up being a costly one as well. Some people out there would have you believe that the only thing you have to do is find the right property to purchase, and make an offer. That’s a part of it yes, but it’s far from the whole picture. If you want to thrive in this business, you’ll have to treat it like a business – with all of the effort, strategy and planning that a business requires.

Today’s real estate environment can be tricky; there are still many good deals to be found, but only in certain pockets of the overall market. The so called “sweet spot” properties in some markets (Arizona, Nevada, Florida to name a few), those built after 2000 and priced below $200k, are very hard to find due to interest from institutional buyers. Older homes can still be found atbargain prices, but you have to be careful when you’re considering one of these. Here are some things to keep in mind when looking at older properties, or those that are in more established neighborhoods. Consider it my informal property analysis checklist.

         First, is the property in an area that would be easy to rent to a family? Consider your ideal tenant and ask whether they’d want to live here. Are schools close-by? What is the status of the neighborhood in the immediate area? What about crime statistics? I like driving neighborhoods and the ones that have a lot of work trucks that say “Bob’s Plumbing” or some other trade usually makes for a great middle of the road rental neighborhood.

         Next, what is the reason for the property being on the market? How long has it been listed? What was the purchase price compared to what is being asked now? What is the top of the market for this property if it were in “like new” condition?

         Is it a distressed property? Are the owners still living there, or is it an REO property? Have there been other offers made and rejected? What are the area comps?

         Who is the title holder of the property? Are there any additional liens on it?

These are all questions that can be researched prior to ever visiting the property. If they match your investment criteria, then move forward with checking it out.

         When you first see the property, what is your impression of the appearance? We call it curb appeal. This isn’t a terribly important point of analysis unless you want to immediately flip it, but it speaks to rentability.

         What is the condition of the primary structure? Does it look like it needs a new roof? Are there cracks in the exterior façade? What do the windows and doors look like? Will they need to be replaced?

         How about landscaping? Is there a sprinkler system? Is it a lawn or xeriscaping? Trees?

The interior of a property can be a detailed checklist all its own; however the important things to look at are the newness of the kitchen and the baths. These two things are the most important aspects of both resale value and rentability. In addition:

         What is the condition of the flooring? Carpet can easily be replaced, but old tile or deteriorated wood floors are more costly.

         Walk as much of the floor as possible to check for loose floorboards and underlayment.

         Are the walls covered? Are there any repairs needed?

         Are the electrical outlets newer or older? This can indicate old wiring that may need to be replaced.

         What is the size and layout of the back yard? Is it family friendly? Pet friendly?

This checklist is not a complete listing of all the points you will need to consider, and should not take the place of a professional inspection. It can however, quickly tell you if the property is worth your effort in making an offer. I hope it helps.

For more information on how you can escape the rat race for good and create lasting, generational wealth with real estate, download my FREE ebook, “How to Find Underpriced Properties: Secrets for Creating Wealth with Real Estate in ANY Economy.”  Get your copy today by going to:  http://StreetWisePropertyInvesting.com/Ebook