Not all properties will be successful investments. The condition of the building, physical location, and amenities are all pivotal factors which will help determine your profit margin over the length of your investment. While shopping around, the excitement of becoming a landlord can make it challenging to keep all these things in perspective. If you want to ensure you don’t end up making a fatal financial decision, keep reading for tips from the experts on how to stay focused and get the most out of property showings.
Define Your Ideal Tenant
Different properties will draw different tenants. It’s your job to figure out which ones you’re looking to work with. Are you looking to provide short-term lodgings for vacationers, university students, or contract workers? Or maybe you’d prefer the stability of young families with school-aged children who stick around for years at a time? Whoever you choose to focus on should influence your buying decision. For example, if you’re looking at renting out a property to post-secondary students, you likely won’t need units with as many bedrooms as, say, a family with three kids. Write a list of desired qualities you would like in an ideal property to help keep you on task.
Search for Red Flags
A coat of new paint and a few new fixtures can give off the appearance that a place is in good condition, but these red flags can help reveal the true story:
- Strong Smells. The smell of sewage or mould are obvious indicators that something is not right with the property, but be wary of “good-smelling” scents that are too potent. This could be a sign that the current owners are using air fresheners or candles to cover up bad odours such as the ones we mentioned before.
- Stuck or Wonky Doors & Windows. Multiple sticky openings aren’t the sign of a bad installation, but rather foundation problems. All properties will settle over time, but too much distortion can cause major issues. The massive renovation costs may very well negate any investment income – steer clear of these properties!
- Patches or Black Spots. Mould and water damage can be detrimental. When going through the property, check the ceiling for patches, the drains for black spots, and the water pipes for leakage. Don’t be afraid to open up cupboards and peek under sinks for any signs of moisture.
- DIY Projects. In this world of tutorial videos and DIY trends, amateurs taking on larger renovation projects aren’t all that surprising. What can be problematic, however, is if the current homeowner has taken shortcuts with systems that only professionals should be working with. Electrical, plumbing, and HVAC are all areas you don’t want to find clues of hand-crafted solutions.
Do Your Research
If the space is looking like something you could work with, ask the owner or realtor these important questions:
- What are the property taxes?
- What is the crime rate like in this area?
- How close are public transportation and schools?
- What is the job market like in this neighbourhood?
- How close is the surrounding community?
- Are there any future developments planned for amenities like restaurants, coffee shops, and shopping?
Property showings are a great way to help you determine whether a space is the right fit for your investment goals. Take full advantage of your time by following the tips above and when you need purchasing advice or support, we can help! You may know us at GIL for our excellent property management reputation, but did you know we also have a full-service residential sales team standing by, ready to help you find your perfect property? Give us a call today to get started!