What do you consider red flags?

[Kusha Karvandi]

I’m looking to buy 3 bedroom single family homes in the Chandler, AZ area with the intent to turn them into long term rentals. When investing in a property, what types of things do you consider red flags that lead you to avoid that property? I know there’s a balance between certain things that may be unattractive to the average buyer (which makes it easier for an investor to get a better deal), but what things would be non-negotiable?

[Cara Lonsdale]

Would you live there?

When evaluating properties that I want to hold as long term rentals, I put myself in the Tenant shoes as I walk through it.  I walk the floorplan and look for bedroom size, kitchen size, bath size and count, yard, open concept, etc.

Then I look for the bubble (my husband says I need a new word for it because "bubble" and RE don't make good bedmates.) lol  But what I mean by bubble is...what is within a 1 mile radius of the property that will be your Tenant's life?  Where is the nearest Costco?  Where will they shop for groceries?  Entertain themselves?  Go to the movies?  Grab a glass of wine?  Hear some live music, etc.  You get the idea.  Since we are so spread out here in Greater Phx, the "bubble" is SO important to people.  They don't want to drive far to get to the things they do in life.

Then I turn toward what needs to be done to make this property habitable.  All of my units are to the caliber that I would be willing to live in them myself.  They are all CLEAN (most important), updated, and include design touches that set them apart from the competition.  Items like a stainless fridge with ice/water maker, brushed nickel hardware, always a washer dryer (I can't believe any landlords don't provide this automatically), etc.  You get the idea.  So, when the landlord down the street provides a small 15 CU FT apartment fridge because it was cheap at Home Depot, you will be set apart because you not only have the nice fridge, but offer the water/ice maker.  Seems silly, but makes a difference to Tenants, and really doesn't add too much more in expense when calculated over the years of use.

Lots to consider......  That should get you started.  Best of luck to you!