In a dog-eat-dog world, due diligence is crucial to a successful real estate business which involves investments. Very simply, the definition of due diligence is ‘the investment and verification of certain details of the investment’ in question.
This can be done in several ways, and of course with some of the old players, this is done by running around looking for information that could either damn or support the investment. Normally, how one conducts due diligence before purchasing a property is by looking at service contracts and agreements, verifying income such as rental histories, calling local authorities to check for any record of violations as well as doing an exterior and interior inspection of the property as well.
But with the internet, information that could take ages to gather only requires a few minutes of searching from the real estate investor’s point of view, especially in state in the US where property tax rolls are online.
If you do intend to run a search using this method, you will find that sites contain information such as property, ownership, sales, tax assessment, environmental, economic, crime and demographic records.
Now there is also a checklist that one can use to complete a thorough ‘due diligence’, and here are some of the things that you must look for such as Property records, Property tax records, Comparable sales, Neighborhood crime, Flood zone map, Hazardous waste, Demographic and economic data and Code violation search.
With information on all these factors available on the internet, one can accurately determine whether or not the property he/ she intends to invest in is truly worth the money or time.