Out-Of-State Investor's Check List of Questions
The following lists of questions are suggested questions to ask before you plan to purchase residential real estate outside of your neighborhood.
It’s probably best to speak with at least three licensed real estate sales professionals and three property managers in the area. During each interview, you'll want to learn as much as you can about that area's real estate sales market and rental market. At the same time, you'll want to ask the right questions to determine if that professional will meet your needs, requirements and standards.
Here are some basic questions to ask the real estate agents:
- What areas do you cover?
- How long have you been in the business?
- How do you work with investors? Walk me through the process.
- What types of properties do you specialize in?
- Do you have any investments of your own?
- What type of housing do you recommend for investors- single family, multi-family? Etc.
- What kind of market are you experiencing? What kind of market have you experienced over the last five years? Ask for CMA reports. (Comparative Market Analysis) describing price changes, list price to sales price ratios, inventory changes, etc.
- What kind of industry and jobs are in the area? Where located? What are best areas for rentals, why?
- Could you give me a summary of the expected closing costs out in your area?
- Would you provide me with references?
- Do you have a property manager that you would recommend?
After talking with at least three agents, contact at least three property managers. Make sure you ask the following:
Regarding the Market:
- What is the rental market like? For single family? For multi family? What is the vacancy rate? What kind of people rent single family homes versus multi-units?
- What are best areas for rentals?
- Where can I read about landlord and tenant rights in your area?
- What types of amenities will tenants pay extra for? Garages? Indoor laundry? etc.
- What kind of maintenance and other costs should I expect? Can you provide me with a sample cost sheet?
- According to the state and local laws, are there any times when you are required to have an on-site property manager?
- Is there rent control in your area? Do you see it coming?
- What new developments are coming to your area?
Regarding Your Services:
- What areas do you cover?
- What do you charge? What fees should we expect?
- Who pays for advertising? You or me?
- What will you do if rent isn't paid on time?
- How often do you do inspections? Do you drive by? Take photos?
- How do you qualify tenants?
- How often do I receive reports/statements from you? Would you give us an example?
- What rental agreement do you use?
- What do you do to keep up-to-date on landlord/tenant rights?
- Have you ever had to evict anyone?
- If we need an eviction, do you perform the eviction, or do you hire an eviction service?
- How do you handle repairs?
- How many properties/units do you manage?
- Do you own any rentals?
- Are you full-time property manager? Do you do real estate sales, too? Are you licensed?
- What happens when you go on vacation? Who handles the property management?
- How do you market (advertise) your rentals?
- What is the vacancy rate on the properties you manage?
- Who do you use for repairs? Do you have a team of handymen and contractors? Are they all licensed? How did you choose them?
- Would you provide us with referrals- current owners, and former owners you once worked with?
- Do you have a real estate agent you would recommend?
Once you have gone through this process, then you are ready to visit the area. Be true to yourself and honest with the professionals that you choose to work with. Choose to work with one real estate agent exclusively. You'll get the best service that way; and if you've been diligent in your interviews, then you should feel comfortable with the professional that you've chosen.
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