When you’re looking at real estate investment properties, be sure to keep a cool head. Even if a property has a lot of great things going for it, you should eliminate it from consideration if you notice any of the following 5 real estate investment deal-breakers:
- A visible slump or droop in the roof line. This is easy to spot. From outside the house, visually examine the roof and all its sections. If you notice that the roof (or any long stretch of it) looks like it is lower in the middle than it does at its ends, that indicates serious problems. The entire structure of the house could be settling, the trusses and structural members under the outer roof sheathing may need to be replaced, or another problem could be at work. Those are all costly problems to correct. Walk away.
- Spongy floors. If a porch’s surface feels soft underfoot, chances are that the entire porch’s deck needs to be replaced, and probably the supporting joists underneath too. And if the floors inside a property feel spongy when you walk on them, that’s even worse because there is a structural problem inside the house that has been caused by water, dry rot, or even termites. Try to get to the basement (if the sponginess is found on the first floor) and see what is going on. But the house is almost certainly not worth considering. Replacing joists and flooring is going to cost you a lot of money.
- A visible or concealed water line on basement walls. Go into the basement and look carefully at the exterior walls. Do you see a water line on them? (Most often, it looks like a raised, chalky line that runs parallel to the floor.) Or do you see the traces of such a line, even though the seller has painted the walls to disguise the problem? If so, the basement has flooded in the past. Look to see whether either a sump pump or a French drain has been installed to remove water from the basement – and what the condition of those installations is. But you should probably forget the property. There are others out there that don’t have basements that flood. Buy one of them instead.
- Jacks or other floor-leveling devices in the basement. They are long tube-like supports that run from the basement floor to the joists beneath the first-floor floorboards. People install these devices to level the floor above. The seller will probably tell you that they are there “to prevent sagging,” but that’s not exactly true. People install jacks to correct sagging, not prevent it. Unless the house has tons of other assets going for it, write it off.
- A maze of disorganized wires surrounding a breaker box. When you examine the circuit breaker box, it should have all the breakers labeled (“second floor baseboard outlets,” “washer/dryer,” and so on). The wires coming out of the breaker box should be well separated from each other, not a tangled mess. If things are snarled and unlabeled, that’s a sure sign that the quality of electrical work that you can’t see – all the wires that are behind the walls – were installed by an amateur, or not up to code. You’re looking at more than an expensive repair. You’re looking at a hazard.
What about Mildew and Mold?
Those are deal-breakers too. We’ll tell you everything you need to know in a future post on this blog.
How to Cut the Cost of Repairs and Renovations on your Real Estate Investment
Get your Real Estate Salesperson license
Consider Setting Up Self-Storage Facilities on Land that You Own
Before Buying Properties Check Out Local Employment Trends
Train to be a Property Manager
Personal Real Estate Coaching
How to Hire a Great Property Manager