Real estate can be an excellent investment tool to supplement your 401(k) or other investment vehicle. Plus, you can fine tune real estate investments to your particular skill set. If you enjoy hands on work, you could flip houses. If you enjoy management, you may decide to buy rental properties. Or, you could invest in a real estate company and let the company do the detailed work. However, before you do any investing in real estate, knowing the history and value of the property is essential.
How to Determine the History of a Real Estate
Before you do any investing, you’ll want to do some serious investigative work. Knowing the history of a property can help you avoid making a bad purchase. There are several ways you can obtain this information.
Where to Look Online
Initially, you can find the estimated value of a property as well as a brief property history for free online at sites like Zillow or Realtor.com. However, that information only skims the surface. You’ll likely have to look much deeper. To do that, use a source such as Address Scoop, which can give you even deeper information such as:
Owners’ cell phone numbers,
Where to Look in Person
In addition to the above-mentioned sources, you can also look in person for this information.
One of the first places to start is at the Assessor’s Office. This will likely be necessary if the property is old and only a few of the more recent records are online. At the Assessor’s Office, you can review a tax history back to when the property was first built.
Why Do You Need All of This Information?
You’ll want to get a complete history of the property for a variety of reasons.
Flexibility in Pricing
If you know the value of the property and what the current owner owes on the property, you can determine how likely they are to negotiate with you. A homeowner who has 30 or 40% equity in the house is more likely to negotiate than one who is underwater on the mortgage.
Determine There Are No Liens
In addition, you’ll need to know if there are liens on the property. If there are, this could affect your ability to get a mortgage. If the liens aren’t cleared up by the current owner, there’s even a chance you would have to assume them, which you don’t want!
Make Sure Improvements Have Been Done Properly
You’ll want to look at the tax record to see if the square footage given matches the square footage listed in the real estate listing. If it doesn’t, there’s a chance that an addition was built at some time, perhaps without getting the proper permits, which could cause the discrepancy.
Real estate can be an excellent investment, but you’ll want to first take the time to thoroughly research the property. By doing so, you can avoid buying homes that may be more hassle than their worth, both when it comes to your time and money.