Rental property investors in Oak Park are always looking out for another rental property to buy. However, the time will come when you need to back out of a real estate deal. Figuring out when to keep moving forward or when to back down is very important when choosing rental homes that could offer a good return on your investment. A lot of successful rental property investors have a list of deal-breakers always in mind. Here is a closer look at some of the top reasons to back out of a real estate deal.
The Appraisal is Too Low
Real estate deals with appraisals that are too low tend to end really quickly. As you are gathering information on the property, you should be able to figure out exactly how much you want to put down and finance. If the appraisal isn’t high enough to back the full amount of loan you need, walk away.
The Monthly Payments are Too High
There will be times when the financing you will need to purchase a new rental property doesn’t add up the way you need it to. If you still cannot get the rate you want despite working with different lenders, it’s best to move on. A straining monthly mortgage payment will not be good for your cash flows.
The Inspection Reveals Major Problems
Regarding financial issues, property condition is one of the top reasons to back out of a real estate deal. Properties will usually need some repair and improvement to make it rent-ready. However, if you discover major issues during your property inspection, it might be too expensive to repair. It would be more prudent to pass up a property like this unless you are willing to shell out the cash for a great contractor.
Inaccurate Information in the Listing
Though many real estate agents do business with integrity, there are those who don’t. Some may try to unload a problem property by putting false or misleading information in the listing or fail to disclose important information. If you feel anything off about the deal, you should walk away from it. The seller and their agents could be hiding problems that could turn into big trouble later on.
Previous Work Done Without Permits
Buying remodeled property sometimes leads to some good real estate deals. But, ensure that you can secure the permits from the previous owner of the property for significant changes made such as an addition or building a deck. You could be fined for violation of permit regulations if the local building authority inspects the property again. If they can’t show you the permits, it would be best to move on.
You Feel Pressured to Make an Offer
In competitive markets, one needs to move fast when you find the right property. But you must not feel pressured to buy any property. Do not let pressure- from the real estate agent or from your own investing goals- push you into making a decision that could be costly for you. If you feel like you need more time to do your due diligence on a property, it is best to resist buying it immediately.
Are you in the market for your next Oak Park rental property? Real Property Management Advantage can help! We work with real estate investors at all levels, helping you find great off-market deals. Contact us today!
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