Investing in real estate can be a very lucrative business, as Dean Graziosi has shown us time and time again. However, it can also turn into a deep, dark money pit, sucking your bank account dry. What’s the difference?
One of the largest reasons that real estate turns from an investment into a sink hole is that the investor is unaware of issues that can arise before buying a piece of property. Many of these issues revolve around the overall upkeep for the investment property. While you don’t have to be a contractor to invest well, it does help to know some of the warning signs.
· Land sloping toward the building – This may not seem like a big thing, unless you consider water drainage. If the land around the property slopes towards the house, chances are good that the ground around the building will get saturated in areas of high rain or snowfall. Ground saturation can cause mild to severe settling of the building.
· Cracks in the walls – You may look at small cracks and think, “That’s not so bad”, but those cracks can mean bigger problems. Cracks in basement walls and foundations, generally caused by settling, can also mean sticking doors and windows, as well as a history of leaks.
· Discoloration or recently painted walls – Areas of discoloration along the tops or bottoms of walls can mean mild to severe plumbing problems. Many property owners “clean up” the discoloration by painting over them. If you suspect this might have been done, check the closets; most people don’t think of painting in there, and the discolorations will show clearly.
· Bouncing floors – In older houses, the floors are sure to have at least a small amount of give when you walk across them. However, too much give can mean sagging or unstable supports. Generally, it’s a good idea to look at the supports no matter how small the amount of give is.
By following these pointers alone, you’ll have a better chance of picking up good real estate investment property rather than a money pit.