Checklist
Pre-Purchase Due Diligence Checklist
Everything to verify before you remove contingencies on your first rental — the documents, inspections, and numbers that separate a good deal from an expensive lesson.
- Confirm the actual rent, not the asking rent Get the current lease and a rent roll. A seller's “market rent” estimate is marketing, not income.
- Pull two years of operating history Tax bills, insurance premiums, utility bills, repair receipts. Real numbers, not the listing pro forma.
- Order a professional inspection Roof, foundation, HVAC, plumbing, electrical, water heater. Never waive this on your first deal.
- Verify the roof and HVAC ages These are your biggest near-term capital expenses. Know how many years are left before you own them.
- Check for permits on any additions Unpermitted bedrooms or units can't always be legally rented and may not appraise.
- Confirm zoning allows a rental Some areas restrict or license rentals. Call the city before you assume.
- Research the neighborhood's rent-to-price ratio Compare monthly rent to purchase price. A weak ratio rarely cash-flows no matter how nice the house.
- Get a property-tax reassessment estimate Taxes often reset to the new sale price. Budget the future bill, not the seller's frozen one.
- Quote insurance before you commit Landlord (not homeowner) policy. In some markets premiums alone can sink the deal.
- Check the flood zone FEMA map. Flood insurance can add hundreds per month and is easy to miss.
- Review HOA documents if applicable Rental caps, fees, and special assessments can quietly destroy cash flow.
- Estimate make-ready costs from the inspection Turn the inspection report into a dollar figure before you finalize your offer.
- Re-run your deal numbers with real figures Plug verified rent, taxes, insurance, and reserves into your screener. Does it still work?
- Confirm your financing and reserves are solid Pre-approval in hand, all five cash buckets funded, reserves untouched.
Due diligence is the window — usually a week or two after your offer is accepted — when you can still walk away and keep your earnest money. It is the single most valuable period in the entire purchase, and beginners routinely waste it being polite instead of thorough.
Work this list top to bottom. Anything you can’t verify is a risk you’re choosing to absorb. Print it, check the boxes, and don’t remove your contingencies until every line is honestly handled.