The Pre-Offer Checklist
- Market rent verification: Pull 5+ comparable active and recently rented listings within 0.5 miles. Confirm the rent assumption in the calculator against market data.
- Calculator analysis at conservative inputs: 8% vacancy, 50% expense ratio, current mortgage rates. If the deal doesn’t meet your return threshold: do not proceed.
- Property tax verification: Look up actual tax bill from county assessor website. Seller estimates and actual often differ by $500–$2,000/year.
- Zoning and rental permit check: Confirm the property is in a zone that permits rental use. Check if the city requires a rental license or registration.
- Actual rent roll and lease review: Obtain current signed leases. Compare to market rent. Note expiration dates.
- Utility responsibility verification: Who pays water, gas, electric, and trash? In many markets, landlords cover water — a $100–$200/month expense often omitted from analyses.
- HOA rules and fees: Confirm rental is permitted (some HOAs prohibit rentals), current fees, and any pending special assessments.
- Flood zone and insurance check: Look up FEMA flood zone status. Zone AE requires flood insurance ($800–$3,500/year) not included in standard quotes.
- Neighborhood vacancy tour: Drive the neighborhood on a weekday morning. Count for-rent signs and vacant properties. High local vacancy is a bad sign not visible in listing data.
- Inspection by rental-experienced inspector: Specifically evaluate CapEx items: roof age, HVAC age, water heater, plumbing, electrical. Get contractor quotes for deficiencies.
🔑The Checklist Saves $20,000 on Average
Professional rental property investors report the pre-offer checklist catches deal-killing information on approximately 40% of properties initially considered. Most common deal-breakers: flood zone requiring expensive insurance, HOA prohibition on rentals, actual rent roll below market, and deferred maintenance exceeding the deal margin.
Post-Inspection Checklist
- Obtain contractor quotes for all inspection-identified items.
- Re-run calculator with adjusted purchase price (offer below asking to account for repairs).
- Verify seller’s claimed expense history against actual bills (utility accounts, invoices).
- Confirm title is clear: no liens, easements, or pending judgments.
- Review local landlord-tenant law: notice requirements, eviction timeline, security deposit rules.
Run Checklist Item #2 Right Now
Calculator analysis at conservative assumptions — the most important checklist item.