How To Use The Internet To Perform Due Diligence On Small Rental Properties

Copyright 2011  Landlord.com

Your main goal during the due diligence phase of a small rental property acquisition is to gather the most reliable, factual, up-to-date and verifiable information that’s available on the property and its owner. This way, you’ll have the information that’s necessary make a calculated and informed buying decision about the property under consideration, and to avoid being bamboozled by an unscrupulous seller trying to talk you into buying a “lemon-of-a-property.” Today, savvy investors can quickly perform most of their property due diligence research by using their personal computer and an Internet connection linking them to the myriad of Web sites that contain property, ownership, sales, tax assessment, environmental, economic, crime and demographic records online.

Perform Due Diligence Inspections Before You Make An Offer To Buy
 

The four main reasons for performing thorough due diligence inspections on small rental properties before you ever plunk down your hard-earned money are to avoid:
1. Buying small rental properties located in declining areas with no immediate turnaround potential.
2. Buying small rental properties with “hidden” problems that can’t be quickly and cheaply solved.
3. Getting snookered into buying small rental properties with “undisclosed” major defects that are too costly to correct.
4. Buying small rental properties contaminated with environmental hazards that can make the property uninhabitable, and render it worthless.
 

Use The Checklist Method When Performing Property Due Diligence Research
The checklist method is the fastest and most efficient way to perform the following due diligence searches on small rental properties:
 

1. Property records search: Check your county property appraiser or assessor’s property records.
2. Property tax records search: Check your county tax collector’s property tax records.
3. Comparable sales search: Check your county’s property records for recent sales of comparable properties within the same area during the past six months.
4. Neighborhood crime search: Check the crime risk rating for the property’s address with local law enforcement agencies.
5. Flood zone map search: Check the property’s address on local flood maps to determine if it’s located in a flood zone.
6. Hazardous waste search: Check the property’s address for environmental hazards with your local environmental protection agency.
7. Demographic and economic data search: Check demographic and economic data for the property’s address.
8. Code violation search: Check the property’s address for code violations with your local code enforcement department.
 

Use The Internet To Perform Due Diligence Research On Small Rental Properties
 

As far as I’m concerned, the Internet is one of the greatest inventions of all time, and ranks right up there with flush toilets, sliced bread and basketball! For real estate investors, the Internet is the single best property due diligence research tool available. Especially for investors who are located in counties where property tax rolls are online. If your county’s property records are available online, you can quickly find out who owns a property, when it was purchased, how much it cost and its tax-assessed value. For example, here in Tampa, I can log onto the Hillsborough County Property Appraiser’s Web site and armed only with a property’s street address, and almost instantly obtain the owner’s name, mailing address, sale price and dates for the latest and prior sales, and the tax-assessed value of the property broken down by land and improvements. I can also get a site map plotting the improvements on the property, along with the tax account, or folio number assigned to the property. Then, I log onto the Hillsborough County Tax Collector’s Web site, and type in the property’s street address or tax folio number to obtain property tax information about the property to include any tax exemptions claimed, special tax-district assessments and tax payment status.
 

Where To Find The Names Of All Of The Property Owners In Your County
 

The names of virtually every property owner in your county are available at your county property appraiser or assessor's office on what's known as the property tax roll. The property tax roll lists every parcel of land in a given county. Depending upon where you live, each parcel is assigned a separate tax identification number, either an assessor's parcel number, APN, or an appraiser's folio number. To find out if your county’s property tax roll is available online, simply type the name of your county and state into a search engine and click on search.

Online Property Records Search
 

The following Web sites list the county property appraiser and assessor offices that have their records available online:
 

earch System
www.pac-info.com
Tax Assessor Database
www.pubweb.acns.nwu.edu/~cap440/assess.html
Public Records Online
www.netronline.com/public_records.htm
National Association Of Counties
www.naco.org/counties/counties
Public Records USA
www.factfind.com/public.htm
International Association of Assessing Officers
www.iaao.org/1234.html
 

Thomas J. Lucier is the President and CEO of Home Equities Corp, a privately held Florida Corporation established in 1995, that specializes in the purchase, fast-turnaround and resale of small residential rental properties in the Tampa Bay Area. Tom’s new 92 page special report, How To Find, Buy And Turnaround Small, Mismanaged Rental Properties For Maximum Profit, $29.95, is available for purchase at the Landlord.com e-Store .

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