When buying an investment property, it is essential to be practical and ensure you don’t overlook important aspects: home inspection, neighborhood, etc. With that being said, now, before you place an offer, is the best time to take an in-depth look at the neighborhood. What signs tell you an area isn’t the best? Watch out for these red flags – you’ll be glad you did when the time comes to find tenants:
Too many homes are on the market
Take a drive around the neighborhood. Do you see a lot of “for sale” signs? If so, forget this neighborhood and move on. Neighborhoods with tons of “for sale” signs may point to illiquidity in the market and pricing pressure. However, that isn’t always the case. Some may be looking to cash in on rising home values. Others may be downsizing. Talk to your REALTOR® to get the real story.
There’s no available parking
Whether you are looking downtown or in a suburb, parking is a definite concern. While the home may have a garage, there may not be space for guests. With that in mind, take a look around to see if there is street parking. There is nothing more frustrating than not having a spot for friends and family to park.
Homes look too similar
Ever hear of a cookie-cutter neighborhood? For those that don’t know, a cookie-cutter neighborhood is full of homes that look similar. But, looking similar isn’t the issue. The issue is whether or not you see some differentiating factors: decorative wreaths, garden art, etc. If every home looks the same, the homeowner’s association may be too restrictive.
Next door homes aren’t well-maintained
The condition of surrounding homes can be detrimental to the value of a home. Drive around and look at the properties to get a feel for how the neighbors take care of their property. If the neighborhood looks run down, it may not be a great place to buy.
It’s in an industrial area
Industrial areas are not very appealing. Take a drive around the surrounding areas of the neighborhood and look for strip malls, restaurants, boutiques and more. These nearby amenities are a great way to attract tenants.
There are lots of empty storefronts nearby
Don’t merely look for storefronts, look to see if they are busy. Busy is a sign of a great area while vacant storefronts signal an area in decline.
Fewer students enrolling in the school district
Even if you don’t have kids, the school district matters. The sign of a great school district and area is an increasing or steady enrollment of students. Shrinking class sizes are a red flag and signal the school may not be the right option for your children.
Bottom line? Take a drive around the neighborhood and think about the home’s resale value before you buy.
Do you have any questions about investing in the Central Texas area? TALK Property Management is a great resource! Call us today.
