Investing in multifamily real estate can be a great money-earning opportunity. That doesn’t mean that you should jump on the first property that you see. Entrepreneurs like Steven Taylor know what to look for when searching for a great investment. In addition to looking for the positives, it’s also essential to look for red flags. Here are four warning signs to watch out for.
One of the biggest things that prospective tenants have in common with homebuyers is that location matters. Look for properties in up and coming areas. If the area is on the decline, prospective tenants are likely to look elsewhere. If you wouldn’t live or work in the area where the property is located, it’s best to continue looking.
Lack of Proper Maintenance
A good Landlord takes care of the property. If the building hasn’t received maintenance in a while, it’s likely to need a lot of repairs. Even if you think that you can handle the repairs, you should bring in a building inspector to see exactly what’s going on. The inspector can uncover issues that the current owner might not know about. You can then look into the cost of the repairs and see if they’re something that you can manage.
Never go into a deal without hard facts. The seller can tell you numbers, but you should be able to see those numbers on paper. Ask for information about rental rates, vacancies, profits, and the like. If they won’t give you the actual numbers on paper, move on.
The Seller Won’t Budge
You want to make money on your investment. Negotiating with the seller is part of the process. If they won’t budge on the price (even if the property has been on the market for a while), it may not be the best investment.
Investing in multifamily real estate can be quite lucrative when done properly. You shouldn’t just jump at the first property you find, though. You need to take your time to find a property that’s going to give you the best return on investment.