If your property investment strategy is to go it alone – as in not rely on a property sourcing company to locate investment properties for you, then it is up to you (obviously) to do due diligence in checking the property out and ensuring that 1) it really is what the listing claims it is and 2) the scope of any renovations/ refurbs/ improvements that will be needed to make it a profitable prospect, whether you eventually intend to rent it out or prefer to treat it as a straight flip.
COVID-19 has changed almost everything in life, and that is certainly true in the property market. Physical viewing opportunities have been scarce, and it is likely to remain that way for the near future at least.
In lieu of physical viewings estate agents have begun offering virtual viewings, and, according to industry experts, these viewings may well be the ‘wave of the future’, even after the pandemic subsides, as they offer the kind of convenience that ‘browsing’ would be property buyers love.
There are indeed lots of advantages to these virtual viewings, at least in the early stages of your potential purchase. You can view a possible property investment from miles away – which, for most savvy property investors they are often – but in a way that is far more detailed than the standard ‘video showcase’ that estate agents have been using to market their listings for several years now.
In pandemic times these viewings also limit the health risks for everyone, something that lots of people are quite rightly concerned about. But even when things get ‘back to normal’ being able to ‘walk through’ a potential investment in the Midlands or the North from the comfort of your Southern Counties armchair will be an ongoing plus for many property investors.
The way estate agents conduct their virtual real estate viewing will vary from company to company, and even from agent to agent, but most are choosing to conduct them via some form of video conferencing software – often Zoom – with the estate agent physically walking through the property and then responding to buyer questions as they come up.
So, is it possible to make a decent judgement call based on a virtual viewing, given that you won’t be able to poke around in dark corners and otherwise examine the space in the way you might (should) do during a physical viewing? Many are finding the answer is yes, but only if it’s done the right way.
If you are sourcing property for investment alone then you already know that there is more than a little work involved. One of the biggest mistakes those new to the property investment space make is buying on spec, without doing proper due diligence. This often leaves them with a white elephant that either becomes a money pit (remember that movie?) or has to be resold, often at a loss. Losing money IS NOT the idea here.
With this in mind here are some tips for getting the most out of any property viewing, but especially a virtual one.
Before you attend showing find out everything you can about the property in advance. Ask Try to get your hands on the home’s disclosures, which lay out any “material defects” in the home, so you’ll know right off the bat if there are any issues you’d like to explore further. These should be available from the listing agent.
It also pays to ask the listing agent if they can provide you with a copy of the property’s floor plan. Having the floor plan in front of you as you ‘attend’ a virtual showing will help you navigate the experience more smoothly and that even holds true for a physical walkthrough, as agents often don’t point out everything.
Spend time looking at any posted photos and videos of the property. If there are parts of the home that you can’t see well in the photos or have questions about, make a note of it.
Read the listing description carefully, and plan (and jot down) questions that arise from it.
Whether you are planning to rent out the properties you invest in, or to flip them for a profit, you should also make sure that you understand the immediate neighbourhood. Not the town or city, but the area directly surrounding. In any town or city there are certain areas that are ‘better’ or ‘worse’ than others and areas that are better suited to certain demographic groups (singles and couples vs. families with children for example.)
Understanding this is crucial, especially if you intend to rent out investment property. Provided you’ve been smart and already figured out who your ideal tenants are and what they want (if not you should, and this information will help) you will need to ensure that property investments under considerations will be in line with what they are looking for.
If you intend to flip, you will need to understand who your eventual target market will be. Understanding the immediate neighbourhood is a large part of this, and not just in terms of recent comparable sales prices.
To do this you should actually get out there, either by car or on foot, and experience the area for yourself. If distance or movement restrictions prevent that at the very least spend some time with Google Earth, viewing the area in that way (and bearing in mind that imagery is not always up to date.)
Whatever you plan to do with the investment properties you eventually purchase, usually work will need to be done prior to resale or rental. If you are viewing a property remotely it will be harder to see what needs to be done so that the cost of repairs/renovations can be factored into your potential profit equation.
Attending any showing – virtual or in person – with a list of areas to examine – to have the agent show you – is very helpful. The following list may be too comprehensive for the investment property you are considering but it is a good example (if you want to print your own copy you can do so here)
If you like what you see during the virtual walkthrough you will need to act as fast as you would usually. Virtual property showings are effective, and so there may be plenty of competition quickly.
As virtual property showings do have the ability to drum up a lot of interest in a property, make sure you follow up with the agent right away — you don’t want to lose out on your opportunity to put in an offer.
The COVID-19 pandemic has made it more challenging to get the inspections and services needed to close real estate deals. An addendum can often now be added to give buyers more time to make sure the inspections and appraisals they need are accomplished — and maybe even allow you the time needed to see the property in person before you invest in it.