Imagine that you’ve just found a property that you love. It’s in a great neighborhood, plus it’s affordable and looks updated. What is the next step?
If you said, “buy it!” then we need to talk.
Once you’ve found a property that you like, don’t jump in without inspecting. And this means you must learn how to properly inspect and improve a property.
Find a quality professional inspector and get a written report. The secret sauce of real estate investing is this: you want to look for properties that need “lipstick” – not a complete rebuild. What do I mean by lipstick? Lipstick includes simple fixes, like fresh paint and carpet. It does not mean remodeling a kitchen, redoing the entire electrical system, or replacing a bathroom.
The following list is what I use and I think it will help you get focused when considering a property. Think about the house in these terms and you will set yourself up for success.
How to Inspect and Improve a Potential Property
What to inspect on the interior of a property:
Water damage. Check the roof and the plumbing to make sure nothing is damaged or needs to be replaced.
Lead-based paint. If you find lead-based paint, it will require treatment and a repaint. Be aware.
Windows. Make sure to check if they are operational and safe.
Appliances. Check for age and functionality.
Cabinets/Counters. Check for serious aesthetic injuries and calculate those into your cost.
Plumbing. Make sure to scope this out well. Check for leaks and take the time to flush all toilets.
Electrical. Do all of the plugs work? How is the electrical paneling interior?
Heating/Cooling. Make sure this is working. It can be a pain to find out later that the heat doesn’t work.
What to improve on the interior of the property:
Remove all debris. This is the easy step.
Clean everything. Hire a thorough service, or if you are just getting started, get your friends involved.
Paint. This can be the quickest way to revive and refresh a property. When choosing colors, you will want to stay neutral. Make sure to use a color palette, color board, and get a few opinions on your choice. Another option is to take a look in your area and see what colors model homes are using.
New floors. Again, this is an amazing refresher. Find carpet and/or tile that fits your color board.
New bath and kitchen faucets. This is often overlooked, but necessary. Poor bathroom faucets can cause all kinds of stains from leaking around the sink.
Refurbish or replace kitchen and bath cabinets. Cabinets show wear heavily. Make sure they are fresh and the whole house will feel new.
What to inspect on the exterior of the property:
Roof. Is there life left? Look for sagging, discoloration, missing shingles, etc.
Chimney. These may need replacing or they may just be decorative chimneys. Check them out.
Siding. Consider what kind of siding is on the exterior. Does it need covered or replaced?
Services. What is the setup? Check sewer, water meter, electric panel and gas. Are they functional?
Foundation. Look for cracks in the slab that need leveled. Also look for bad beams.
Termites. These are such a pain. Look out and avoid them if at all possible. While you’re at it, it’s a good idea to get a full inspection for termites, bed bugs, and more.
Septic tanks. Make sure everything is working.
What to improve on the exterior of the property:
Landscaping. If you’re new to the business, you can get your family to help with this. Treat overgrown bushes, plant new flowers and lay fresh mulch. This makes a huge difference.
Shutters. Repainting these is an easy rejuvenating touch for curb appeal. Find a safe but attractive color, and go with it.
Paint. Along with the shutters, paint the trim, front door, garage door, etc. If it can be livened up easily, liven it up.
New front door. Be sure that no drafts are getting in.
New exterior trim lights. This will help the place sell again and again. Keep it bright.
As you can see, it’s important to be critical when you look at properties. If you go in with a critical attitude, you won’t be easily played by agents or your own heart.
Look critically and be wise with your investments. This makes a huge difference in your success as a real estate investor.