Key Questions to Ask Before Buying an Investment Property

Buying an investment property involves more than finding a property at an appealing price. Investors should understand the property's condition, location, operating costs, existing arrangements, and potential responsibilities before making a purchase.

Whether you're considering a rental home, multifamily property, commercial building, or land in Northeast Arkansas, asking the right questions can help you complete more thorough due diligence.

1. What Are My Investment Goals?

Start with your own objectives.

Ask yourself:

• What type of property am I looking for?
• How involved do I want to be?
• Am I comfortable managing the property?
• What property characteristics matter most?
• How long do I expect to own the property?

Having clear goals can help you determine which properties deserve closer consideration.

2. What Is the Property's Condition?

Look beyond cosmetic appearance.

Ask about the condition and age of:

• Roof
• HVAC
• Plumbing
• Electrical systems
• Windows
• Appliances
• Foundation
• Exterior
• Parking and other site features

A professional inspection can provide additional information about the property's physical condition.

3. What Are the Ongoing Expenses?

The purchase price is only one part of owning an investment property.

Potential expenses may include:

• Property taxes
• Insurance
• Maintenance
• Repairs
• Utilities
• Landscaping
• Property management
• Vacancy
• Professional services

Understanding these expenses can help you evaluate the property's overall operating requirements.

4. Is the Property Currently Occupied?

If you're purchasing an occupied property, ask for information about the existing tenancy.

Depending on the property, this may include:

• Current leases
• Rental rates
• Security deposits
• Lease expiration dates
• Maintenance responsibilities
• Utility arrangements

Have an appropriately qualified professional review legal documents and explain applicable obligations.

5. What Is the Property's Rental or Operating History?

If historical information is available, review it carefully.

Look for information about:

• Previous occupancy
• Rental income
• Operating expenses
• Maintenance
• Repairs
• Vacancy

Past performance does not guarantee future income or investment results, but historical information can provide useful context.

6. What Is the Property's Zoning?

Confirm that the property's zoning and permitted use align with your plans.

This can be especially important if you intend to:

• Add units
• Convert space
• Build additional structures
• Change the property's use
• Make significant improvements

Check with the appropriate local authority before assuming a proposed use is permitted.

7. How Is the Property Accessed?

For rural or commercial investment properties, access can be particularly important.

Review:

• Public road access
• Private roads
• Easements
• Shared driveways
• Parking
• Delivery access

Title and access questions should be reviewed with the appropriate professionals.

8. What Does the Local Market Look Like?

Research comparable properties and current conditions in the area.

For Northeast Arkansas investors, this may include looking at properties in Paragould, Jonesboro, Greene County, Craighead County, and surrounding communities.

Market conditions can change, so current information should be used when evaluating a potential investment.

9. What Professional Help Do I Need?

Investment property transactions can involve several areas of expertise.

Depending on the property, consider consulting:

• A real estate professional
• Lender
• Inspector
• Attorney
• Accountant or tax professional
• Insurance professional
• Property manager
• Contractor

Each professional can help address questions within their specific area of expertise.

10. Does the Property Fit My Overall Plan?

After reviewing the property, step back and consider whether it actually fits your goals.

Don't let excitement about a particular property replace careful due diligence.

A property can look attractive while still having conditions, expenses, or responsibilities that don't fit your plans.

Investing in Northeast Arkansas

Northeast Arkansas offers a range of residential, multifamily, commercial, and land properties for investors to consider.

Whether you're evaluating an investment in Paragould, Jonesboro, Greene County, Craighead County, or another local community, taking time to ask questions and investigate the property can help you make a more informed decision.

Image Realty works with investors throughout Northeast Arkansas and can assist with the real estate side of the buying process.