We wanted to talk a little bit to those of you who have or are going to buy rental properties. Some thoughts in regards to how to avoid mistakes when buying. We wanted to speak first to the analysis paralysis, as they call that. That’s just getting bogged down in the minutia.
Featuring:
Bob Nelson, Eugene real estate investment broker
Marcia Edwards, Eugene residential real estate broker
Marcia Edwards: There are a lot of details in purchasing a property and it can be stressful.
Bob Nelson: And it’s interesting if you know what you’re doing and know what to ask for right off the bat. Asking for, “What’s the rent roll?” And that’s the amount of … that each tenant is paying the form of rent. When they moved in, is becoming an increasing important number given rent control and so forth. And also the deposit that they have and their payment record. Don’t need the payment record quite yet, but you do need to know what is it actually rented for and when were the rents last increased. If they’re increased two minutes ago, just before bringing it to the market, that’s another issue.
Marcia Edwards: So you’re looking for dependable history of income, a source of income. And you’re looking for a property that will sustain that, that’s not in such disrepair that it’s a threat to the income in the near future.
Bob Nelson: But at the same time, do you necessarily need to know what the property produced 10 years ago? The cost of putting a new roof on if the roof does not appear to need attention, et cetera? I mean, I’ve seen people just collect information after information after information.
By the time that they have collected enough to make their decision, the property closed about two months earlier to someone else who had their stuff in a small stack, knew what to ask for, and knew that the decision that they were making was a good one, and moved forward. Literally you can sit there and analyze the thing until you convince yourself not to do anything whatsoever. Making you the largest fool in the game.
Marcia Edwards: And that’s why I think you need good counseling. You need an investment broker like Bob, who understands the perspective and the priorities and can look really quickly at the analysis they’ve provided and tell you if it’s real and tell you if it’s accurate in something you can bank on.
Bob Nelson: And it’s interesting the number of people that will accept a seller’s performance, operating statement, which to a great degree is next year’s rent and some portion of last years expenses.
Marcia Edwards: That’s right. You’ve got to be able to see that quickly, so hire good counsel when purchasing investment real estate.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30 on KPNW for the “Real Estate Today” radio show.
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