You’re investing in a property to bring in additional income as a landlord. That means you need to choose a property that’s not only worth renting out but also won’t cost you more than you’ll make in the long run.
To help you save time and money in your real estate search, here are three warning signs that a potential rental property just isn’t worth investing in.
There are exterior cracks and tilts
It’s just as important to inspect a property’s exterior as it is to inspect the interior, and that doesn’t mean checking out the property’s curb appeal. Cracks and tilts that look like siding issues could actually be foundation problems.
When you begin to repair and renovate a property, smaller issues can quickly become major disasters. Soon you’ll be replacing more and more stuff until you end up having to demolish the entire property and start from scratch.
To avoid potential problems, make sure that you bring a leveler with a laser pointer to a rental property you’re considering. If certain cracks in the exterior are wider than one-fourth of an inch wide, you might want to have a structural engineer come take a look at the property.
The plumbing system is ancient
Sometimes you might check out a property that’s been around for decades with a plumbing system that’s been around for even longer. Outdated plumbing systems include:
- Galvanized steel pipes: Galvanized steel pipes are common in homes built in the 1930s and 1980s. Galvanized steel rusts and breaks down, which leads to dirty water, reduced water pressure, and clogged water lines.
- Copper pipes: Copper plumbing was common in the 1930s. Copper is a concern for plumbing because it may contain lead-based solder.
- PVC pipes: Polyvinyl chloride pipes were used in the 1950s. Sometimes confused with polyurethane, which is made using reaction injection molding (RIM), PVC pipes are less sticky than polyurethane and look like hard, white plastic pipes. Although PVC doesn’t easily corrode, it’s not suitable for hot water supply lines.
However, don’t automatically trust a home’s plumbing system at first glance because it’s modern. Up to 10% of households in the U.S. have leaks in their plumbing that waste up to 90 gallons of water per day. Always have a property inspected by a professional before investing in it.
There’s air fresheners and music playing in each room
When you go to check out a property, the last two things you expect to be warning signs are music and air fresheners. But music and air fresheners are trying to cover up two things about the property: smells and noise.
Bad smells are a cause of concern for multiple reasons, two of which are mold and plumbing issues. Mold and clogs can be expensive to get rid of and repair. Consider that, in addition, the average home has almost 300,000 items in it. are you going to be liable for all of that because of a bad investment?
A noisy building might not seem like a concern for you, but it would be a big concern for your potential tenants. And an income property isn’t an income property if you can’t find tenants to live in the building.
It’s important to keep an eye out for warning signs that a potential rental property won’t bring in a lot of income. By avoiding properties with the signs above, you can reduce your risk of ending up with a property that drains your bank account instead of giving you a financial boost.