If you are a Real Estate investor in Louisville, you are always looking for a great deal. But how can you tell that something is actually a great deal? Here are 5 signs of a great deal when buying Louisville real estate.
5 Signs of A Great Deal When Buying Louisville Real Estate
No Zoning Issues or Liens
It is important that you research a potential investment for any zoning issues or liens on the property. If the property you are interested in doesn’t have the right zoning, you may not be able to use the property for your original plans. In Jefferson County, we recommend checking out the Louisville/Jefferson County Information Consortium site which includes a variety of maps including zoning and infrastructure to name a few.
It is also very important that your intended property does not have any liens on it. A lien is a financial claim placed by a person or a company, which prevents you from selling the property outright until they receive their allotted payments. There are voluntary liens (like a home mortgage) that the owner has agreed to and there are involuntary liens that is placed on the property because of unpaid bills (like an unpaid tax bill or unpaid home contractor bill). If you purchase the property with pre-existing liens, it then becomes your responsibility to pay the lien. You can research liens on a property by accessing the online county clerk’s website, visiting your local county clerk’s office or working with a title company. All you need is the name of the property owner or its address.
If you decide to work with the current homeowner to have liens released prior to purchase, please remember that lien releases must be notarized in order for the county to accept them. Once your lien release has been notarized, you can then submit it to your county recorders office to have the lien removed from your property.
No Expensive Repairs
If a property you are interested in does not have any serious structural issues, then it is probably worth submitting an offer. Even if the property has a slightly outdated kitchen, you don’t have to replace it if it’s still functional or not destroyed. You do not have to follow the TV hype of remodeling every kitchen and bathroom of every investment property you purchase. It is ok to remodel them as your budget allows, even if it takes years. You have to make sure the property is profitable first before investing additional money.
Priced Near Assessed Value
If a property is priced at or below the county assessed value, you can be sure it is a great deal! You can research a property’s assessed value utilizing your county’s Property Valuation Administration (PVA) website. You can access the Jefferson County PVA here. Market Value is usually between 10-25% above the county assessed value. A word of caution: If a property is priced far below market value, it may have damage or some other reason why it is priced so low. You may be lucky and have a seller that is extremely motivated with a great property. On the other hand, you may have just found a bank-owned property in need of expensive repairs. It is always important to do your due diligence before making an offer.
Passes 1% Rule of Thumb
There is a general rule of thumb that real estate investors use when determining if the price of a property is a good deal. They say that the property should rent for about 1% of the purchase price. For instance, if a property should rent for about $1,400 then the ideal purchase price would be about $140,000 for it to turn a profit. In order to use this rule, you will have to analyze the fair market rental potential of the property. Rentometer is a great online tool to use when researching the fair market rental value of a property.
You are in luck if the potential property already has curb appeal! That is hundreds or possibly thousands of dollars saved from potential renovation costs. You will also want to take a look at the overall silhouette of the home and make sure it looks square and healthy. Another important factor of curb appeal is a straight roofline. Sometimes when additions are made or the property withstood damage, the roofline may slope slightly, or might not match the overall composition of the house. Another thing to watch out for is different siding treatments on the home. This may also indicate an addition that lends itself to having structural issues.
If you are a real estate investor looking for a great deal when buying Louisville real estate, then call FairSquare House Buyers today at 502-417-7467. We will handle all of the legwork to look for your ideal investment property. Simply provide us the features you are looking for and we will provide you with some options.