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Questions You Should Ask Before Buying an Investment Property

Aug 17, 2007
In the world of real estate investing, the things that can go wrong are innumerable. While no investor can predict the future and save himself from all loss, asking questions and doing research can offer a great deal of protection. Asking the right questions is particularly important during the pre-purchase phase of any real estate investment. It is during this phase that investors need to ask the right questions in order to avoid purchasing a property that will bring them nothing but sorrow.

The first thing that you should be concerned with regarding any investment property is its marketability. In other words, are you going to be able to sell it? In many cases, the best source for this type of information is your real estate agent. Your agent will be familiar with the housing market in the area of the property and may even know past details concerning the property itself. Some details that might help you determine how well a property will sell include how desirable the community is to consumers; how quickly other homes in the area are selling; how quickly the home has sold in the past; and how long the house has remained on the market looking for a buyer.

The next consideration regarding any investment property is how much profit it could bring. While profit is not guaranteed in real estate investing, you can increase your residual income by purchasing a property that has the highest potential for profit. Questions to ask your agent include how much below resale value is the home priced; how much could the property be worth after renovations; and are other homes in the area appreciating or depreciating in value.

You may also want to ask your real estate agent about financing options open to you as an investor as these may differ from options available to those wishing to purchase a property as a primary residence. Tax laws are another great topic of discussion for those wishing to make an investment in real estate.

Other questions that you may want to consider are those that would be asked by any ordinary consumer looking to buy a property. These questions are property specific and involve the condition of the property. You should always know what repairs need to be done on the property and what mechanics are in working order and which ones are not. Boundary disputes and health issues are often disclosed to buyers before purchase. If they are not, you should ask for the information rather than assume that everything is fine.

Doing the necessary homework before a property purchase is vital for being successful in real estate investing. Ask any investor and he will tell you that most failed investments can be avoided if the right questions are asked.
About the Author
James Klobasa, once broke with no job and $20,000 in debt made a choice that changed his life forever. That choice was investing in Real Estate. With the founder of, The Little Building Co. you too, can learn at Real-Real Estate Investing
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