When a rental home goes up for sale, it’s not always in perfect condition. Some property owners start selling it even if it has existing problems. Of course, they are fully aware that they would be unable to sell it for the same price as a property with all its issues fixed before putting it on the market.
Usually, when a property seller no longer wants to spend money and time conducting repairs, they would rather sell cheap than go through all the trouble. That alone is already an opportunity for an investor.
The first instinct of several investors is to run away from a deal after discovering structural problems in a rental home that they intended to buy. However, wise investors see some structural issues as an opportunity for them to get a better deal.
Some problems are instant deal-breakers. However, there are some that an investor can tolerate provided that they could negotiate a price decrease for it and if they are capable of addressing and fixing it. Here are some of them:
Foul Odor
When a rental home has been left uninhabited for a while, one can expect to smell a foul odor upon entering the premises. If it’s tolerable, it might not be enough to negotiate the price. However, if the stench is too aggressive, that would be a different case. Not only will it drive the competition away, but you can also bargain the price, even for just a little bit.
Common causes of foul odor are often easy to address. It could be rotten food left by previous occupants, pet urine, smoke residue, or mildew on wet surfaces. Inspect the property for the source of the stench so that you can evaluate if you would be able to address it. If it’s not a major sewer leak under the house or an environmental issue, it can most likely be dealt with by professional cleaners.
Hideous Cabinets and Countertops
Just because there are some aesthetic issues here and there, it doesn’t mean that an investor should automatically end negotiations. Most of the time, interior design issues require simple courses of action: replace, rehabilitate, or renovate.
One example is hideous cabinets and countertops in the kitchen. There is no exaggeration in the phrase “kitchens and baths sell houses” — because they do! Kitchens and baths are rooms that tenants use daily. That is why it is no surprise that ugly or messy kitchens and baths are instant deal-breakers for home hunters.
Since kitchens and baths are a huge factor in a property’s value, it would be easier to negotiate for a lower price for properties that have ugly kitchens and baths. You can use some of the money you can save in improving the design of those rooms with easy and affordable solutions.
Wild Jungle-like Landscape
“Curb appeal” is a term that we commonly hear when searching for houses to buy or rent, and one of the main contributors to that is the landscaping outside the facade of a property because that’s the first thing people see.
When a property for sale has been uninhabited for a while, the outdoor space outside the main structure will quickly grow long grass and thick bushes because no one is maintaining them. Sometimes, there may be the presence of junk, worn-out furniture, or garbage. It may take a lot of work to clean up, but it’s not expensive. A budget of $1,000 can go a long way in transforming a hideous lawn into an Eden.
INVESTOR MINDSET
As an investor who hopes to turn the property into a rental home, you have to make sure that you can attract tenants to rent it. Upon discovering issues in a property that can help negotiate a price decrease, ensure that you have a clear plan on addressing them properly once you acquire the property. The investment you will put in for home improvement will start to pay off when rental applicants become eager to respond to your rental agent’s Padleads listing. Have them publish photos of the newly-renovated kitchen and bath or the freshly landscaped lawns to attract more home hunters.