You know that due diligence is vitally important to any investing decision. You probably find it second nature to handle title searches, have contractors give you repair estimates, and do your own “background check” on properties before you buy.
However, there is a certain type of property problem that lurks in plain sight, but often is missed completely by investors who invest in areas other than their own geographic region or who are too narrowly focused on the potential deal itself.
These pitfalls are the “3 P’s” of Street-Related Problems, and they can create a scenario in which you are completely unable to exit a deal when you are ready if you are not aware of them before you buy.
Every neighborhood, city, and region has its own rules for parking on the street and in the yard, but just because those rules are on the books does not mean that anyone is interested in enforcing them. Before you buy, do a little research into local forums about the neighborhood to determine if parking is a problem and, if so, why.
For example, if the neighborhood swim team has weekly meets during the summer that completely block your cul-de-sac and buyers get wind of this issue, that alone could scare them off. On the other hand, if once a year the local church bazaar uses your street for overflow parking, that may not be such a big deal. Find out how other neighbors feel about the issue and the convenience factor, then decide if parking will be a problem for your property.
Sounds crazy, but a well-maintained prison may actually look like a neighborhood park or green space from a distance. Be sure that you check out the area for signs and use a web-based mapping function to determine proximity to local jails and prisons. You can be sure your buyers and renters will, and they’ll likely be less than thrilled about living next door to inmates.
Every neighborhood has its own priorities, and those priorities can sink a deal. For example, if your property is located in a neighborhood with an HOA that is extremely aggressive about lawn maintenance, you have an advantage because the homes will likely look uniform and well-kempt.
However, this will turn off some buyers who want to display statuary in their yards or who simply do not like being told what to do with their property. Check out the streets to determine what types of things appear to matter to the members of the neighborhood, then back up your “street research” with a look into the HOA regulations, if there are any, as well as local codes.
Have you ever lost money on a deal because you missed one of the 3 P’s?
TLD Investments LLC