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Buying Real Estate: 4 Signs It's a Bad Investment

Buying Real Estate: 4 Signs It's a Bad Investment

Considering the volatility of the housing market in the past couple of years, buying a home isn't quite what it used to be.

In fact, many industry professionals predict home prices may continue to drop before they get better. But what if you're looking to buy right now? By ruling out certain red flags, you can help ensure that your potential investment will be a good one. We went to Brandon Green, founder and president of Brandon Green Companies, who lists four factors to consider when purchasing a home.

Location 
This is something you won't be able to change, so make sure the location is right for you. If the home is next to a busy road, train tracks or a major commercial development, that could lessen its value. Is there an empty lot next door? Look at the city plan and find out what the city has in store for it. 

Property Condition
How structurally sound is the property? Structural imperfections can end up costing a lot of money, so you want to make sure the home is in good shape. How functional is the layout? Are there many small, cramped rooms? Is this something you would have to fix in order to resell it? 

Size of the Lot and Lay of the Lot  
Is the lot unusually small? Unusually hilly? Will there be drainage problems? Can you use the backyard? Even if it has the square footage you desire, the lot could be hard to landscape if it's on a steep incline.

Environmental Issues
Make sure there aren't old oil tanks buried underneath the ground. Also, inquire about lead-based paint, as there's always the possibility of lead-based paint in homes built before 1978. (The same goes for underground oil tanks if you’re looking in the Mid-Atlantic and Northeast).

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