Going through all the aspects of the property investment process can be a lot of fun, but it can also be quite overwhelming. No matter how stressful these days, weeks, even months can be, you should never settle for an investment property that will end up being more of a pain than you bargained for.
With any newly purchased property, there will always be projects you need to complete before it’s tenant-ready. But some of those projects, if you didn’t plan for early on or expect, can cause much more trouble than the property itself was worth. Finding a seemingly perfect property and having to move on because of some underlying issues might be difficult, but you’ll be grateful you did in the long run.
Knowing what to look out for when searching for quality properties is essential when it comes to saving money and avoiding trouble down the line. Here are some warning signs that a property on the market could end up costing you a lot more than initially expected:
1. Hidden Plumbing Problems
Plumbing problems aren’t as easy to identify for the typical investor, but they can lead to some of the most expensive and stressful headaches you’ll ever deal with. Though leaking pipes are easy to spot, other plumbing issues are typically hidden within the structural integrity (or lack thereof) of a building. Whenever you’re touring a property, keep your eyes, ears, and nose on full alert for musty smells, strange noises, and stains on the structure that could mean mildew or mold. Additionally, it’s important to turn on each faucet throughout the building and gauge the water pressure, water color, and drainage speed.
2. Fresh Paint on Only One Wall
Does a single wall look a little nicer than the rest? That could mean that the previous owner simply wanted an accent wall, but it could also mean they were trying to hide something. Fresh paint on a single wall often means there is some physical damage underneath, or, even more concerning, significant mildew or mold. In addition to looking for fresh paint, keep an eye out for saggy walls or ceilings throughout the property.
3. Old Windows
If the property you’re thinking about buying is equipped with windows that are more than 15 years old, you might want to think about replacing them early on, though that will cost you. If you don’t replace these older windows, though, you could end up paying even more in energy bills later on. Windows aged 15 to 20 years typically cause draftiness issues inside a home, as well as cosmetic ones. It’s recommended to do more than just find out how old the windows actually are. You should physically check and see if each window opens easily inside the building you’re touring.
“As structures shift and settle over time, insulation, caulking, and other protective materials slowly lose their protective powers, such as older homes leaking air conditioning in the summer and heat in the winter,” said Larry Patterson, of Glass Door.
4. Small or Nonexistent Front or Back Yard
According to a survey by Harris Poll for the National Association of Landscape Professionals, approximately three-quarters of Americans (75%) feel that it is important to spend time outside in their front and back yards. Even if you believe your future tenants won’t be that interested in having a yard, it’s important to take all perspectives into account. Not having a yard might not cost all that much financially, but it will certainly hinder some tenants.
5. Faulty Air Conditioning Unit
Especially if you’re looking into properties located in the part of the country that frequently sees temperatures reaching near triple digits, making sure the AC units are fully functioning and energy-efficient is very important. The U.S. uses more air conditioning than all other nations combined, as roughly 84% of all homes across the country have AC units.
Unfortunately, not every homeowner has properly taken care of their HVAC unit, causing all sorts of cooling and financial concerns. In fact, only 42% of homeowners call professionals to perform routine maintenance on their home’s AC units. It might cost some extra money right away, but investing in high-quality energy-efficient air conditioners will keep energy costs much lower down the line.
6. New Structure in an Area Prone to Weather
If the property you’re considering is only a few years old and is located in Florida, Texas, Louisiana, or any other hurricane-prone state, you need to make sure it is structurally sound. For example, if a new home is built in one of these states without sufficient hurricane-proof windows, though the structure itself might remain intact during strong winds, the windows could shatter, causing all sorts of dangerous and costly problems. Window and door systems equipped with impact-resistant glazing systems of positive 105/negative 130 can actually withstand hurricane force wind speed of more than 100 MPH.
7. Too Many Vintage Fixtures in the Basement
Though some property buyers love the idea of decorating with vintage fixtures, too many of these items rotting away in the basement could mean some serious problems.
“Cracked waste stacks, old brass plumbing, remnants of knob-and-tube electrical, ceiling stains from prior water saturation, oil stains from leaking tanks, asbestos pipe-wrap, and mortar dust around the perimeter are all common in old homes,” added Kate Ziegler, realtor with Arborview Reality. “One or two of these is not a death warrant for the deal, but all of them in combination will be costly.”
8. Clogged Gutters
Even if you are viewing a property on a beautiful day, it’s best to call someone in to inspect the gutters. Clogged gutters, as well as disconnected and missing downspouts could indicate that this seemingly beautiful property you’re about to invest in is a money pit. Over time, a gutter’s mortar can degrade and ruin not only the gutters themselves, but also the building’s roof and siding.
From the size of the backyard to the stickiness of each window frame, even the smallest hidden problem can cause all sorts of financial problems and emotional stress. Be careful with your investments, and above all else keep your future tenants in mind!
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