You've found a great property: It's got good bones, it's in an up-and-coming area, and it's at a price you can afford -- and make a profit from. The only problem? There's no garage. Is that enough to kill the deal? Can you still find a tenant or buyer who'll pay the price you need to see returns?
While there's no hard-and-fast answer here, there are some questions you can ask as a real estate investor to land on the right choice. Here are six things to consider before investing in a house with no garage.
1. How common are garages in the area?
In some places, street parking is the norm, so no garage might be expected. If every other house on the block has a garage, though? It might be a problem -- especially if most people have cars in the area.
2. What's the weather like?
A garage is typically more necessary in places with extreme climates. A buyer or tenant may be willing to trek down the block if the weather's temperate, but if you're in a place with freezing-cold winters, that's probably not the case.
3. Are you renting it out or flipping it?
Renters are more likely to budge on "must-have" features since they know they'll only be in the home for a short time. But if you're planning on flipping the property, you can expect people to be a bit pickier. Buyers on the hunt for their forever home typically aren't too flexible.
4. What's the difference in price?
Get in touch with a real estate agent in your area to get a feel for the market. Ask if they can run a comparative analysis of recent sales and rentals, both with and without garages. Are there any major differences? If so, you'll need to factor this in when bidding on the house.
5. Would you be willing to add on a garage?
Once you buy the house, there's always the option to add that garage on later. You could even opt for a smaller, less expensive carport. Consider talking to a contractor to get an idea of what this might cost and the potential construction timeline.
6. How competitive is the market?
If lots of homes are on the market or rentals available in the area, you'll need to work a bit harder to get those profits. A home lacking a key feature like a garage might not go as quickly as other, more move-in-ready properties in the neighborhood.
The Millionacres bottom line
Your best bet here is some good old-fashioned research. Work with an experienced local agent and contractor, and make sure you understand what's common for your market. You'll also want a good handle on how the lack of a garage can impact your profits so you can adjust your bid and flipping budget accordingly.