We read tons of articles about all the cash we can earn in real estate. Much of the opportunity is very real. However, tales of easy money never prove themselves. Instead, we have to rely on diligence and lots of toil. Many articles offer advice on what is a great property, but the fact is most don't prove to be as strong as we would like.

Choosing a great property based on characteristics you are "looking for" can be fraught with risk. In some respects, you should start trying to identify those items that in a year or two years you will look back and say to yourself, "This is so obvious. Why didn't I notice?" Frankly, the issue is we often look for the reasons to buy. When instead, we should be looking for why NOT to buy.

So, what are the three items you should work hardest to avoid and how do you avoid them?

1. A weak neighborhood.
2. An obscure location.
3. An unrecoverable reputation

How should you go about defining these points?

Researching the neighborhood:

1. Walk the property and take photos of the automobiles. Are they late model? Are they in good condition. Are they sitting on flat tires or rusted out? Are they "pimped" out?
2. Note the condition and types of properties around the property. Are you in the projects? Are you surrounded by industrial properties? How run down are the homes?
3. Are there folks loitering? Who do you see walking around? Check this at various times of the day and various times of the week.
4. Are there unrepaired, run down, or abandoned buildings in the area?
5. What do competing property managers say about the area? What do merchants say? Stop by a local church and ask their opinion.
6. Visit the local police station and check on reports for the property and for the area.

Determining the viability of the location:

1. The property may be handy to everything, but if people don't feel it is a place to live the location may not work.
2. Are there issues with the traffic management in the area?
3. What is planned for development there? Is the area losing ground or is it improving?
4. Are there major "must have" amenities that aren't within easy reach.

Analyzing the property reputation:

1. Ask the residents what they think of the property.
2. Stop by the school and find out what administrators thing.
3. Ask police there impression. Check contractors, vendors, security services, etc.
4. Check churches and the Chamber of Commerce.

Taking the time to determine the perhaps not so obvious reasons to purchase a property is a relatively low cost method to avoid unnecessary risk and losses.