Online Reviews: A Unique Tool For Acquisitions

I check the reviews before buying a pair of running shorts, so why wouldn’t I do the same before buying a real estate investment?

Google reviews can reveal valuable patterns about a property's performance, resident experience, and management effectiveness, which are insights that don't always show up in the financials. By carefully examining these reviews, firms can identify trends that point to either value-add opportunities or potential deal-breakers.

Identifying Value-Add Opportunities

Look for repeated complaints that suggest fixable issues where your firm can add value, such as:

·       Maintenance delays

·       Poor communication

·       Outdated amenities

·       High utility costs due to older fixtures

These trends could indicate a property with strong upside potential. With targeted improvements and better management practices, the resident experience can be enhanced, leading to higher retention rates and rental growth.

Spotting Warning Signs 

On the other hand, some negative review patterns may signal deeper issues that could be costly or difficult to resolve, such as:

·       Consistent security concerns

·       Chronic pest problems

·       Evidence of poor structural maintenance

·       High utility costs due to pricing in the local market

Such trends might suggest systemic issues with ownership or location challenges that could be harder to turn around, potentially indicating a riskier investment.

Google reviews provide unfiltered resident feedback, making them a valuable tool during due diligence. Acquisition teams should use this information to gauge operational risks and identify whether a property presents a strategic value-add opportunity, or a warning to reconsider the deal.