Written By: Jacquelyn Annete García Vadnais
When considering whether to purchase a property, there are several factors that must be studied to determine whether the property will be a good or bad investment. One of the most important parts of the sales process is the inspection. During the inspection, there will be a chance to look at the house closely. In order to learn more about what positive indicators or detrimental red flags to look for in order to determine if a property is a good or bad investment, please review the information below:
Indicators a Property Could Be a Good Investment
The Property Has a New Roof
Having a newer roof, is a positive indicator when determining if a home is a wise investment. The average roof lasts for close to 20 years. If a roof needs to be replaced the median price in the United States is $7,747. Finding out that a new roof has recently been installed or that the home was constructed only a couple of years ago will decrease the cost of repairs.
Number of Bedrooms
The number of bedrooms can make a great difference in terms of a property’s value. For example, families may not want to purchase the home if it only has two bedrooms. The value of a home on average increases by 6.2% if there is a third bedroom. Consider whether the home already has a third bedroom or the potential to add one in order to increase its value.
High Quality Flooring
Homes with high quality flooring may provide a boost in value. For example, hard wood flooring is quite valuable and can increase a home’s value by 3.4%. By choosing an upgrade on the flooring one can potentially see an increase in the home’s value and make it a worthwhile investment.
Landscaping Is Already Complete
Landscaping is one of the most unforeseen expenses when it comes to renovating a home. Homes that already have pools or that have their landscaping done in both the front and backyard can be quite valuable. Some analysis indicates that having a pool can increase a home’s value by an average of 7.3%.
Red Flags a Property Could Be a Bad Investment
There are Foundation Issues
Foundation issues are something that are difficult to spot for the untrained eye. However, there are subtle clues to look for during inspections including that the floors are uneven, the home’s doors may be dislodged from their frames, and there could also be numerous cracks in the doors and hallways. Foundation issues are not something to take lightly because it is not uncommon for those repairs to exceed $10,000. Unless the purchaser is planning on taking an entire remodel project, foundation issues are best avoided when seeking a new house as an investment.
The Home Has Mold
Mold is something that can also be difficult to spot if the buyer is inexperienced. Usually, signs of mold can include teal/green spots on certain parts of the walls as well as a strong musky smell. Mold is expensive to fix and can also cause health problems. Be sure to check walls carefully because making repairs to an entire wall on a home can be very expensive.
There Are Water Pipe Issues
During inspections, water pipe issues can come to light as well. Make sure to get an estimate about what these repairs may cost in order to avoid a large, unexpected bill. If the house has any issues with leaks or poor pipe installation, it could cause even more expensive issues in the future such as mold. If the buyer does not have experience, it is best to bring a plumber with established years of experience in order to determine that there are no piping issues in the home.
Outdated Electric Wiring
It is important to take a close look at the electrical wiring on the home. If the wiring is outdated, it can lead to costly frequent repairs or having to install the electric wiring from scratch. Unless the investor is planning on completing a major renovation, outdated electrical wiring should be analyzed closely to ensure the house is a worthwhile investment.
The Septic System Needs Repairs
There are homes in certain areas that are not connected to the public sewer system, which means that they will have a septic tank. There can be several indicators that a septic tank needs repairs including slow drainage, odors emitting from the septic tank that small like rotten eggs, standing water near the tank, and strange sounds in the piping lines.
Issues with the HVAC System
HVAC systems do need to be repaired from time to time and those repairs can be costly. In addition, the HVAC system was not installed well, it can be very difficult to fix. Look carefully at the home’s HVAC system and determine whether the system is in good condition or whether it is going to need repairs shortly.
Final Remarks
Deciding whether a home is a worthwhile investment is an important decision to make that takes careful consideration. There are certain homes that may have hidden repairs that can exceed the home’s projected value. It is vital to be well-prepared as a prospective investor in order to look for common pitfalls that make a home an unwise investment. In addition, it is essential for investors to know when the home has favorable attributes that will increase the value. By balancing the aforementioned information, prospective home investors have a great deal of elements to look at in order to determine whether a home is a wise investment. For newer investors, be sure to work with an experienced investor in order to find the best possible home investment and avoid unnecessary additional expenses.
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Jacquelyn Annete Garcia Vadnais is an Investment Consultant and field expert blogger for Barracuda Consulting.
Jacquelyn has a JD/ MBA from Suffolk University, an LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.
Please leave your comments below. If you would like to subscribe to our newsletter, click here: https://tinyletter.com/barracuda-consulting. To purchase a full real estate report, or to access a complete suite of investment advisory services please contact us: https://www.barracuda-consulting.net/contact.
When considering whether to purchase a property, there are several factors that must be studied to determine whether the property will be a good or bad investment. One of the most important parts of the sales process is the inspection. During the inspection, there will be a chance to look at the house closely. In order to learn more about what positive indicators or detrimental red flags to look for in order to determine if a property is a good or bad investment, please review the information below:
Indicators a Property Could Be a Good Investment
The Property Has a New Roof
Having a newer roof, is a positive indicator when determining if a home is a wise investment. The average roof lasts for close to 20 years. If a roof needs to be replaced the median price in the United States is $7,747. Finding out that a new roof has recently been installed or that the home was constructed only a couple of years ago will decrease the cost of repairs.
Number of Bedrooms
The number of bedrooms can make a great difference in terms of a property’s value. For example, families may not want to purchase the home if it only has two bedrooms. The value of a home on average increases by 6.2% if there is a third bedroom. Consider whether the home already has a third bedroom or the potential to add one in order to increase its value.
High Quality Flooring
Homes with high quality flooring may provide a boost in value. For example, hard wood flooring is quite valuable and can increase a home’s value by 3.4%. By choosing an upgrade on the flooring one can potentially see an increase in the home’s value and make it a worthwhile investment.
Landscaping Is Already Complete
Landscaping is one of the most unforeseen expenses when it comes to renovating a home. Homes that already have pools or that have their landscaping done in both the front and backyard can be quite valuable. Some analysis indicates that having a pool can increase a home’s value by an average of 7.3%.
Red Flags a Property Could Be a Bad Investment
There are Foundation Issues
Foundation issues are something that are difficult to spot for the untrained eye. However, there are subtle clues to look for during inspections including that the floors are uneven, the home’s doors may be dislodged from their frames, and there could also be numerous cracks in the doors and hallways. Foundation issues are not something to take lightly because it is not uncommon for those repairs to exceed $10,000. Unless the purchaser is planning on taking an entire remodel project, foundation issues are best avoided when seeking a new house as an investment.
The Home Has Mold
Mold is something that can also be difficult to spot if the buyer is inexperienced. Usually, signs of mold can include teal/green spots on certain parts of the walls as well as a strong musky smell. Mold is expensive to fix and can also cause health problems. Be sure to check walls carefully because making repairs to an entire wall on a home can be very expensive.
There Are Water Pipe Issues
During inspections, water pipe issues can come to light as well. Make sure to get an estimate about what these repairs may cost in order to avoid a large, unexpected bill. If the house has any issues with leaks or poor pipe installation, it could cause even more expensive issues in the future such as mold. If the buyer does not have experience, it is best to bring a plumber with established years of experience in order to determine that there are no piping issues in the home.
Outdated Electric Wiring
It is important to take a close look at the electrical wiring on the home. If the wiring is outdated, it can lead to costly frequent repairs or having to install the electric wiring from scratch. Unless the investor is planning on completing a major renovation, outdated electrical wiring should be analyzed closely to ensure the house is a worthwhile investment.
The Septic System Needs Repairs
There are homes in certain areas that are not connected to the public sewer system, which means that they will have a septic tank. There can be several indicators that a septic tank needs repairs including slow drainage, odors emitting from the septic tank that small like rotten eggs, standing water near the tank, and strange sounds in the piping lines.
Issues with the HVAC System
HVAC systems do need to be repaired from time to time and those repairs can be costly. In addition, the HVAC system was not installed well, it can be very difficult to fix. Look carefully at the home’s HVAC system and determine whether the system is in good condition or whether it is going to need repairs shortly.
Final Remarks
Deciding whether a home is a worthwhile investment is an important decision to make that takes careful consideration. There are certain homes that may have hidden repairs that can exceed the home’s projected value. It is vital to be well-prepared as a prospective investor in order to look for common pitfalls that make a home an unwise investment. In addition, it is essential for investors to know when the home has favorable attributes that will increase the value. By balancing the aforementioned information, prospective home investors have a great deal of elements to look at in order to determine whether a home is a wise investment. For newer investors, be sure to work with an experienced investor in order to find the best possible home investment and avoid unnecessary additional expenses.
--
Jacquelyn Annete Garcia Vadnais is an Investment Consultant and field expert blogger for Barracuda Consulting.
Jacquelyn has a JD/ MBA from Suffolk University, an LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.
Please leave your comments below. If you would like to subscribe to our newsletter, click here: https://tinyletter.com/barracuda-consulting. To purchase a full real estate report, or to access a complete suite of investment advisory services please contact us: https://www.barracuda-consulting.net/contact.
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