Keith Flenniken is the owner of Flenniken Enterprises, a real estate investment firm with a diverse portfolio of residences and commercial properties. He recognizes that spotting a good investment property is not easy. Here are four tips he recommends for new real estate investors who are looking for a good property to flip:
Look For Structural Problems
All problems will cost money to repair, but some can be fixed inexpensively. An aesthetically displeasing issue like a broken window or peeling paint has a quick fix, but structural problems are a completely different animal. A nice looking property with structural problems does not have anywhere near as much value as a shabby looking property with no structural issues. Investors who are just starting out should leave properties with structural defects to the more experienced investors.
Consider the Location
Location plays a major part in a property’s value, with the neighborhood a home is located in having a major effect on its value. Aim for the worst looking property in the best looking neighborhood, as this property will have more upside than a nice looking property in a lesser neighborhood.
Evaluate Nearby Features
Proximity to amenities and necessities will also impact a property’s value. Homes that are close to a factory, loud highway, or traffic-heavy attraction will always be less desirable than a home near the beach or lake. Stay away from features that will cause homes to sit on the market for an extended period.
Look for Strong School Districts
Most housing flips are sold to first time homebuyers, and real estate investors who plan to rent will be targeting couples and families as well. A house that is located in a strong school strict will be worth more than a home in a less reputable district, so once again aim for a fixer-upper in a good school district instead of a nicer home in a less desirable school district.