In less popular markets, there is still hope that an MLS property is an ok deal. But at least consider the possibility of it not being one, especially in looking at how long the listing has been active. Remember too that these aggregate sites have a fairly significant delay in advertising properties from when they actually become available on the MLS. So that doesn\u2019t help much in terms of timeliness being oftentimes critical for the best investment properties.<\/p>\n
![\"invest-locally\"](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2015\/11\/invest-locally.jpg\" "\\"\\"")
<\/p>\n
Location<\/h3>\n
This one is relevant whether you are looking at properties local to your area or non-locally. If you are local to the property, you may not have to find the answers to this now because you might know them already. But you need to know the market fundamentals — always. Is the area you are shopping in growing or declining? How will the tenant pool be? (Tenants can cost a property owner a fortune.) All of these things can dramatically impact the return on a property you buy.<\/p>\n
Now, here\u2019s the trickster that even I have run into. I have looked at properties from Zillow, and even just from the MLS directly, in areas of cities I was very familiar with so I thought I had a good grasp on the viability of the area the property was in. But then, I\u2019d go check out the property. I mean, it is literally down to the street that a property\u2019s location matters! Everywhere around where these properties were was pretty decent, but then out of nowhere, there was this little pocket of absolute disaster — back to back streets of vacant properties, totally sketchy area, and no potential for good properties whatsoever. And that was in a market I thought I knew very well!<\/p>\n
So the problem with individual properties listed on Zillow and those guys is that you have absolutely no security as to where the properties are actually located. When I buy turnkey rental properties<\/a>, I don\u2019t necessarily feel like I have to go visit the property directly, but most certainly if I\u2019m considering an MLS or Zillow property, I would never<\/em> buy it without actually going to it. You just never know. Location is so key.<\/p>\n Also key — and something that is rarely guaranteed no matter how nice the pictures look — is the condition of the property in question. It\u2019s amazing how nice pictures can dress up a property and make it look drop-dead fantastic. A property could be in shambles, and you would never know it just based on the Zillow listing. On the most basic level, just looking at a property in person, can tell you a lot.<\/p>\n On the more advanced level — and this is for any property, not just Zillow properties — don\u2019t ever buy anything without getting a professional home inspection done. You just never know, and having major repairs pop up unexpectedly can cost you your investment. It\u2019s amazing how many people put lipstick on a pig and then use an MLS or Zillow listing to try to snow you! Maybe they aren\u2019t doing it intentionally, but it doesn\u2019t matter — this is your investment.<\/p>\n Never, ever, ever trust your perception of a property\u2019s condition based on the listing. This is true to the MLS, but especially with Zillow or Trulia — they really are now putting properties on there from non-MLS sources. Man, does that open the door for some pigs to be listed. Be smart!<\/p>\n This one is interesting. Maybe it\u2019s because Zillow so nicely provides you with so many numbers in their listings. I also love seeing when a listing tells you what the cap rate or return on your investment will be if you buy that property. Please, whatever you do, don\u2019t trust that number. Do your own calculations. Even with property taxes and insurance and all that — please don\u2019t go off estimates.<\/p>\n Find out what the actual numbers will be. The only numbers you can\u2019t get actuals for are repairs and vacancies, so for everything else, please, don\u2019t talk to me until you can tell me the actuals. I\u2019m not going to make a judgment when the only numbers you give me are estimates. Then, the underlying message here with numbers too is that you need to make sure you know how to calculate them in the first place. If you haven\u2019t a clue on how to do that, check out “Rental Property Numbers So Easy You Can Calculate them on a Napkin<\/a>.”<\/p>\n In my opinion, Zillow and those guys give you so little information that can give you a legitimate perception of a property, it\u2019s unreal. Now, if you present a property and then you go check it out and everything starts panning out as advertised, well then, that\u2019s one thing. But until you go to the property in person, whatever you do, resist the temptation to take the listing as reality. In my experience, a listing has rarely ever portrayed reality.<\/p>\n In thinking of reality in a different context — the reality too is that the best investment properties truly never hit the MLS in the first place. This is true for residential property and commercial property. I know a commercial broker in LA, and in knowing about his operations — no wonder no one can find a killer, amazing deal in LA. The brokers take them all! He gets deals unimaginable to the rest of us. We can\u2019t imagine them because we never see them. Again, the degree to which this is true is greatly dependent on the market you are operating in, but I always have it in the back of my head any time I am looking at a listed property.<\/p>\nCondition of the Property<\/h3>\n
Numbers<\/h3>\n
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<\/p>\nReality<\/h3>\n