How to Pick a Good Investment Property

We have had owners kick themselves for making mistakes when it comes to a purchasing price that seems too good to be true – and sometimes, it is. Usually, the owners who experience this phenomenon are those who are purchasing properties in lower-income neighborhoods. The thought process is, how can you lose? 

However, the fact is that when they bought that property at a certain price, it was not occupied. It was not in service. 

Often, there are code enforcement orders against the property or reasons why the gas can’t be turned on. In reality, there are many things owners aren’t able to identify or find out about until after they purchase the property. 

Suppose you intend to hire a property manager to put a property back into service. In that case, I think the whole idea of separating the group, person, company, or team that is going to manage your property from the person who is going to help you purchase it is dead wrong.

They are two different processes. However, if those two processes aren’t connected and don’t talk to each other, it spells trouble. 

The last thing I want to do is have to explain to an owner a year into managing their property that, while I was the one who sold it to them, I feel in retrospect they paid too much. I want to avoid having that conversation. Instead, I want to be able to say these kinds of things up front when we’re looking at the property. 

I value being able to look someone in the eye and tell them exactly what I think is going to happen and what they can count on based on my professional experience. I want them to know my thought process from day one through purchasing, and I want to be available for them to discuss questions we should ask, as well as keep track of the information we’ve already gathered. 

Ultimately, I want them to see me as a collaborator and a partner, so they can be assured they are making the right decisions – and I’ll stand behind what we do together. I don’t want to be hired as a third-party manager after the fact because I can’t win many times – and if I can’t win, the owner can’t win. 

It’s easy to avoid falling into the trap of discovering a property with a “too good to be true” price tag when you’ve got all the information in front of you and are actively working with a team that can acquire anything else you need to make your final decision. 

Why Hire A Property Manager?

There are a lot of advantages to buying (and selling) with your property management team, especially if they function the way we do.  

First, just like we helped you price that property when you bought it, we’re going to be able to help you price that property when you sell. 

Second, we work with roughly 400 owners in Ohio alone. As a result, we have owners who are looking to buy or sell properties within our portfolio. Therefore, we’ve got the leases and the cash flow statements. Plus, we know what’s going on and all the requisite documentation about those properties. 

It’s easier for prospective buyers to make an informed purchase because we have the data and are intimately involved in that purchase. 

I’m a buy-and-hold person: Once I buy something, I never want to sell it. But if you do, those two reasons are part of what adds value to our team. By working together, you get a bigger advantage – and a greater overall knowledge – of what’s available and possible. We value transparency, so you can walk into every deal with your eyes wide open. 

From a pricing standpoint, there are some tax questions to ask. There is a different set of resources that need to be consulted when you go to sell. From a practical standpoint, we respect licensing, realtors, and not crossing the Code of Ethics. We keep things on the up and up; we’re professionals. 

However, if you do decide to work with us, or let your property management team help inform your future buying and selling decisions, it’s important to stay the course. There is nothing more frustrating for us as managers when one of our owners lists a property with somebody outside of our office or outside of our team. Then, the issue – especially if it’s an occupied property – becomes about tenant relationships and our interactions from that perspective. 

It’s in your best interest to have a positive relationship with your tenants, even if you’re trying to sell. 

That’s another major advantage of having a property management team like ours; we work well with tenants. 

When working with an occupied property, we aspire to maintain a positive relationship with tenants and make sure they’re comfortable paying the rent and or able to enjoy their tenant’s rights and so forth. It’s always a can of worms when you’ve got a listing agent who doesn’t understand why the tenant won’t let them show the property at a moment’s notice and so forth. 

Again, from a practical standpoint, it’s very, very hard sometimes to get tenants to cooperate with showing a property. There’s a far better chance of getting tenants to cooperate if the people showing the property are the people those tenants have worked with for a while. They trust us to look after them and value their needs.

Final Thoughts

In short, if something seems “too good to be true,” it probably is – and you likely need to take a closer look. When you venture out alone to invest in real estate, it can be challenging to determine whether a property that seems like a good deal actually is one. That’s where a professional can help, giving you a huge advantage as you navigate the world of real estate together. 

We strive to use our expertise to boost our clients’ know-how and capabilities in the market; our job is to guide, advise, and ultimately lead them to make the best possible decisions. We want you to find a property that will pay off and suit your needs. Whether you intend to buy and hold or looking for something you could flip and sell to another investor (perhaps someone we already work with), our job is to keep your investing goals in mind and help you get to where you want to go. 

You don’t have to fall into the “too good to be true” trap – and we sincerely hope you don’t. I always tell people that real estate investments are among the best risks you can take and that there’s never been a better time to invest. If your goals are to expand your empire, please know that you’re heading in the right direction. 

Expansion is achievable; it’s entirely within your grasp. A few smart moves, the right partners by your side, and you’re there.