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4 Simple Tests To Find Good Real Estate Investment Properties
You're driving along the road when you spot it. There in the middle of a shaggy lawn sits a disheveled property. It may need a good coat of paint, or a shutter straightened out, but it's easy to see that with a little work it could be a little gem of a property. Best of all, sprouting in the middle of the unkempt grass is a For Sale by Owner sign. It looks like the perfect fixer-upper, but how do you know for sure? First, consider your reason for buying. If you're looking for a property to 'flip' - to buy low, fix up and sell for a profit - there are a number of things you'll want to take into consideration. If your intent is to buy it as rental property, there's a different set of consideration, and if you're looking for a home of your own, there's yet a third. Let's assume, for the sake of this article, that your intent is to flip the property for profit. Test 1: The Neighborhood Test Before you invest another hour, do yourself a favor and take stock of the surroundings. The old saying in the real estate business that the three factors in selling a home are 'location, location and location'. What is the location like? No matter how wonderful the property is, you'll have a difficult time selling it for top price in a bad neighborhood. That doesn't mean that it's a bad property - depending on how low a price you can bargain, you still may be able to make a decent profit from it. Another consideration in the Neighborhood Test is a bit more subjective, and you'll have a feel for it if you're local and keep an ear to the ground. Is the neighborhood in transition? A neighborhood that is on the cusp of a renewal effort like gentrification can be a great place to invest, as long as the upward momentum continues. An area that is on the outskirts of new development will often benefit from that as well. If, on the other hand, the neighborhood shows signs of slipping into a decline, you might want to pass the property by. If you can see that the neighborhood is slipping, so will prospective buyers. Are there 'amenities' nearby? Depending on the neighborhood and your prospective market, those amenities might include a neighborhood school with a good reputation, a corner store within walking distance, or a park right down the street. In one Massachusetts city, for example, the value of properties in a formerly depressed neighborhood skyrocketed when a local university announced a commitment to provide full tuition to the children of neighborhood residents, and provided additional incentives to home buyers within several blocks of their campus. Investors who bought just before the announcement realized excellent turnaround on their investment. Test 2: The Pricing Test Is the home listed with a Realtor, or is it a FSBO? How realistic is the asking price? Is it in your price range? Can you work out a low or no-money-down financing option? How open to negotiation is the seller? Will you be able to realize a profit after making needed repairs? Test 3: The Condition Test This is one of the most important tests. The property you want to buy doesn't require any extensive, expensive repairs. It should be structurally sound, without any major plumbing or electrical problems. If you're just starting out, you'll want a property with repairs you can manage yourself - repainting, refinishing floors, a little landscaping. If the property requires more extensive repairs, it will cut into your profit, or eliminate it altogether. When you view the property, really kick the tires. Look for indicators of hidden problems. Here are a few things to look for:
Test 4: The Title Test The final test is the title test. Be certain that the title to the property is clear, with no liens or attachments that could sour the sale. If there are, and you still want the property, work out a conditional sale, where your purchase is contingent upon the liens being satisfied. If the property passes all of the above tests with flying colors, congratulate yourself. You've got yourself an investment property that could turn a pretty profit for you. Andrew is the web owner of Real Estate Investment Tips, a website that provides informational guide on real estate investment, foreclosure home and more. You can visit his website at:http://www.buy-and-sell-house-fast.com/
MORE RESOURCES: Experts predicted Minnesota real estate agents would quit, 5 INVESTIGATES found a different reality 5 EYEWITNESS NEWS Altadena’s rough real estate market: Slower sales, lower prices, lottery winner plucking up properties Los Angeles Times Real estate magazine reports Les Wexner as Blue Heron buyer The Martha's Vineyard Times Real estate expert warns socialist mayoral candidate could trigger massive NYC exodus - Fox Business Canadian psychologist Jordan Peterson sets up shop in the Valley, records show The Business Journals Bedrock flexes its real estate portfolio to grow Detroit's tech ecosystem - Crain's Detroit Business Bedrock flexes its real estate portfolio to grow Detroit's tech ecosystem Crain's Detroit Business Office real estate wide open in Denver as vacancy rate hits 36 percent Colorado Public Radio Vail Valley real estate inventory is on the rise VailDaily.com NAR Real Estate Forecast Summit National Association of REALTORS® Real Estate Partners Dollar Tree Let's Talk Business: June residential real estate sales lagging, heritage grants and more Pueblo Chieftain A New Perspective: Here Comes the Groom | Real Estate Insights Piedmont Exedra Boston Real Estate Times Unveils 2025 Excellence Award Winners: Honoring the Visionaries Shaping New England’s Future Boston Real Estate Times Dawson County weekly real estate transactions, July 18 Central Nebraska Today State lawmaker joins Westport commercial real estate brokerage as vice president Hartford Business Journal Private Credit Surges in 2025 as Real Estate Developers Bypass Banks The World Property Journal Real estate news: Senior apartments in Tustin sell for $83M; Fullerton Metrocenter snares $118M Orange County Register 5 Essential Tech Tools for Real Estate Agents National Association of REALTORS® New York Housing Market Trends 2025: Is the Tide Turning for Buyers? Norada Real Estate Investments Los Angeles Water & Power commits $100 to real estate debt Pensions & Investments Today’s Mortgage Rates: The States Offering Lowest Rates – July 18, 2025 Norada Real Estate Investments Property management with an owner’s mindset J.P. Morgan Corcoran McEnearney Announces Evan Lacopo to Lead the Number One Real Estate Office in Alexandria, Virginia Alexandria Living Magazine SRS Real Estate Partners Arranges $4.53 Million Ground Lease Sale of Walmart Property in Deltona, FL citybiz Real Estate Market Report (June) highlandscurrent.org Licking County real estate transfers for June 30-July 4 range from $200,000-$14.6 million The Newark Advocate Banner Real Estate Group Breaks Ground on 334-Unit The Faywell Multifamily Development in The Heart MultifamilyBiz Bridgemarq Real Estate Services® Declares Dividend Yahoo Finance Moon Becomes Next Real Estate Frontier, NAR Reports Higher Foreign Investment In US Huntsville Business Journal CBRE Announces Strategic Leadership Appointments Across U.S. & Canada Advisory Business Boston Real Estate Times Gravelle advises on current real estate market in Grant County Columbia Basin Herald Frederick Ford, real estate executive and first Black Union League Club president, dies at 98 Chicago Tribune Mapletree Sells Sun Belt Warehouse Portfolio to EQT Real Estate for $241M Commercial Observer Operation Pawssible: Greenbrier Humane Society gets a boost from local real estate company Mountain Messenger GenesisM Breaks Ground on 154,000-Square-Foot Biomanufacturing Facility in Bedford, MA Boston Real Estate Times AGC MA Announces 5th Annual Building Advancement Externship to Bridge Educators with STEM Construction Careers Boston Real Estate Times What's the most expensive property sold in Rhode Island? July 18 real estate transactions The Providence Journal The Pipeline: Commercial real estate roundup for 7.18.25 Richmond BizSense LOCAL REAL ESTATE TODAY 7.18.25 KQEN News Radio Home Buyers: Stop Freaking Out After the Home Inspection National Association of REALTORS® Home Buyers May Have Accepted a New Norm on Rates National Association of REALTORS® Tips on spotting real estate investment opportunities and avoiding risks, from experts at GR Property Group Community Impact SRS Real Estate Negotiates $4.5 Million Sale of Walmart-Anchored Property in Metro Orlando Shopping Center Business Miami-Dade’s self-storage surge a boom for real estate IslanderNews.com Hunt Companies Acquires Controlling Interest in Carter, Strengthening Real Estate Development Platform Business Wire Stage Point Europe Launches Its RWA Token $SPET, Setting it up as a Bridge Between Crypto and Real Estate Morningstar Top Stocks for Real Estate Investment Elite AI Stock Forecasts - Massive wealth growth Jammu Links News New plans unveiled for Water Street’s second phase Tampa Bay Times July Economist Snapshot: What Will the Big Beautiful Bill Mean for Commercial Real Estate and Housing? Urban Land Magazine Vend Leans Into Verticalisation As Real Estate Revenue Grows 11% In Q2 onlinemarketplaces.com Is Apollo Commercial Real Estate Finance Inc. a good long term investment - Explosive market performance Jammu Links News Vendor & Real Estate Partners Dollar Tree Wood County Recorder reports on second quarter real estate activity BG Independent News Development Services Offers Online Early Assistance for Commercial Real Estate Projects Prince William County Government (.gov) Real estate sales in Jefferson, Bullitt and Oldham counties for Jan. 2-5, 2025 - The Courier-Journal Real estate sales in Jefferson, Bullitt and Oldham counties for Jan. 2-5, 2025 The Courier-Journal Drake Real Estate Partners closes largest fund yet after pivoting to institutions Private Equity Real Estate | PERE Real Estate Transfers ~ June 25, 2025 The Bedford Citizen Choice Properties Real Estate Investment Trust 2025 Q2 - Results - Earnings Call Presentation (OTCMKTS:PPRQF) Seeking Alpha Real estate transfers: Lake Township condominium complex sells for $5.61 million - Canton Repository Manitowoc's real estate transfers include a sale of nearly $1 million to Riverside Dairy Herald Times Reporter Real estate office transforms into collection center for donations being transported to Kerr County kens5.com |
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