Posted in Investing in Real Estate, Single Family Houses

One of the Biggest Mistakes I’ve Made in Real Estate

neighborsMeet the neighbors!

Prior to buying a house for investment you should knock on the neighbor’s door. At least the doors on either side of you and across the street.

A few years back I purchased a home in New Port Richey, FL just north of Clearwater. I didn’t knock on doors at that time and if I would have, I would not have bought that house. The neighbors across the street made it very difficult for us to sell the house as they all had motorcycles and hung a rebel flag on their house every weekend. Worse than that, every time we had a prospective buyer they made a point to visit my house and tell the potential buyer that the street had major flooding issues.

We finally sold the house, but only after losing three buyers.

Never underestimate the damage bad neighbors can cause when renting or selling homes next door to them. We won’t buy houses when we notice certain things such as: junk cars, unkempt houses or seeding looking characters in the immediate area.

Another good reason to knock on your neighbor’s door, besides initially determining if they will cause a negative impact on your investment, is to enlist their help. When we purchase houses to hold for rentals we always get the name and numbers of the surrounding neighbors. This enables us to call them if we can’t reach the tenant or they can call us if the tenant is behaving poorly. This can save us a trip to check on a property where we can’t reach the tenant while also keeping us informed if they are not taking care of the place. When you’ve been directly involved in property management as I have for 35 years, you want to save time and increase efficiency wherever possible. It’s a lot easier to call a neighbor and ask if they’ve seen a moving van in the driveway then to drive over to the house when the rent goes unpaid and the tenant ignores your calls. The neighbors love it when you tell them that you are putting the house in great condition to attract a nice family that can eventually buy the home. Give them your phone number and ask them to call you if the lawn goes uncut or the occupants are not behaving right because “we know this is a nice family-oriented neighborhood and if our tenants don’t act right, they will be evicted.” Then ask for their number in case you ever have an issue with the tenant.