When you are purchasing a rental property that is distressed, foreclosed or a short sale, you could be taking a major risk.  Of course, the bigger the risk, the more money you could make in the end.  However, it is important that you check each and every house thoroughly before you sign anything, or you could end up with more problems than the investment is worth.

When inspecting your rental property, there are several things you should focus on.  The first is certainly the structural integrity of the building.  If you purchase a house before you learn about the foundation, roof or the frame of the house, then you have no recourse if you should discover something fundamentally wrong with the place.  Fixing structural damage costs a lot of money, and will most certainly eat into any of the profit that you could make from the sale.

Plumbing issues should also be thoroughly investigated before you buy.  You must check the specifications of the land and the house to ensure that the plumbing is adequate for a building of its size.  Many investors have gotten into a situation where a home was purchased, only to find that the plot of land was never approved for a house with more than one bathroom.  If you find yourself in that position, there is not much you can do about it. 

Always conduct checks on the electric wiring, as well.  This is a bit easier to fix than the previously mentioned problems you might encounter, but you certainly don’t want to be taken by surprise.  If you do find work needs to be done, you should always find a professional to help you with any wiring. 

If you can ascertain that a house doesn’t have these issues, then you can move forward with relative confidence.  Without these inspections, you cannot be sure what kind of home you are buying, and therefore can’t rely on a return on your investment.
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