Three things to know when making an offer on a house

Buying investment property can be a great wealth accumulation strategy, or it could end up causing you a whole lot of financial stress.

Of course, that is the risk associated with most kinds of investments – there are simply no guarantees that your purchase will amount to success.

However, besides the usual amount of research that goes into buying investment real estate, there are a few facts you need to know to minimise your risk of failure.

Let’s look at the three things you must know when making an offer on a house…

Is there anything wrong with the house?

The sooner you get to the nitty gritty of this question, the better. Try simply asking the seller to avoid wasting time and resources, but follow up with an inspection if you are close to making an offer on the house.

If there is a structural problem or a pest infestation, you need to know about it. Both of these issues can cause expensive damage and produce safety hazards.

If there is a problem but it can be fixed, you can use that as a point of negotiation – either the seller needs to do the work as part of the agreement or the cost of fixing it must be deducted from the price.

Who are you dealing with?

If you see potential in a home for rental purposes or resale value, chances are you want to jump at the opportunity.

It is important to be careful in your approach – try to properly gauge the seller’s situation. Do they have to sell fast? Will they be flexible?

Making a low ball offer could end up backfiring, causing you to go back to the drawing board.

What is the local market like?

It is vital that you investigate the surrounding neighborhoods of potential investment property. How does your prospective real estate stand up to home values in the same area?

Are there any development projects in the pipeline? Does it have a future for growth or will it remain stagnant?

When making an offer on a house, definitely, cover all your bases to maximise your chances for achieving successful returns.

By Steve McKnight

Steve McKnight, the founder of PropertyInvesting.com, is a respected property investing authority as well as Australia's #1 best-selling business author.