Is your passion hang gliding? Bull riding? Planking? No matter what your hobby is; forget it. If you are an investor looking for the perfect 10 rental, you won’t have time to do any hobbies if you aren’t efficient. Investors may need to look at tons of properties to find one keeper. To rule out properties quickly, speed up the process by starting your inspections on the outside. Many of your big ticket items are found outside, not inside a house. Personally, I’d rather pay for paint over fixing foundations and roofs.
Below are a few hints for weeding out properties without ever going inside.
Take Some Speed
When inspecting properties, your main focus is to cull out the duds ASAP. It’s all about speed. How fast can you make a decision to say “no” to a property? The more “no’s” you go through, the sooner you will find a “yes.” If you drive into a neighborhood and don’t like the mobile home park in the vicinity, keep driving. Don’t feel compelled to think: “I might as well look inside now that I’m here. “Feel uncomfortable with the water tower abutting the property? Abhor properties with steep driveways? Shun rentals at the bottom of a hill because of drainage issues? No biggie. Don’t get out of your car. You have inspected and rejected the investment just by driving up to the property.
Go with Gaga: Start on the Edge
If the property passes your “drive up, look around the neighborhood” test, it’s time to get out of the car. Bring your notes or iPad to write up a preliminary punch list.
The very first time I went to look at potential rentals, I had no clue what I was doing. I planned to go straight to the kitchen to see how cute the layout was. I figured tenants would like a spacious kitchen. Luckily, my mentor, Brian Porter, wouldn’t let me go in the house until I had walked the perimeter.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
So What do you do? How Do You Start your Property Inspections?
Start out by circling the property. Go clockwise if the fences allow. Check out the foundation with an eye for cracks, holes and slumping walls. Hope to see an intact HVAC unit that doesn’t date back to the Eisenhower era. Be prepared to go in accessible crawl spaces so skip the high heels and suits. As you continue your tour, note the condition of the roof, gutters, the siding, and the decks. If you don’t like what you see, time to leave for the next property.
While walking the perimeter of the property, check out the yard as well. Do you see any money drainers such as a swimming pool or dilapidated outbuildings? What are the retaining walls trying to tell you? Trees are nice for shade and appearance, but are any huge limbs waiting to fall on the roof? Do the neighbors horde tires and rusted cars in their yards? If you feel uncomfortable with the creek behind the house, skip going inside and focus on the next property.
Once you have completed your outside tour of a property, you can decide whether it’s worth your time to go inside. If the property is a definite “no,” feel no regret in driving away before entering. Congratulations! You just gave yourself more time to find a keeper.
Question for Readers:
What hints do you have for physically inspecting the outside of a property?
Photo: Sean Ellis