Welcome to the 3rd part of our 4 part series titled: How To Inspect An Investment Property.
In this 4 part series on how to inspect an investment property we will take a look at:
- How To Inspect An Investment Property – Suburb Research
- How To Inspect An Investment Property – Inspecting The Street
- How To Inspect An Investment Property – Inspecting The Outside Of A House
- How To Inspect An Investment Property – Inspecting The Inside Of A House
The number one mistake first time and established investors make is to think they can understand an area by jumping on realestate.com or domain.com. While its important to understand what’s available online its far more important to understand the underlying drivers in a market and to do the right research upfront.
It is important to take note of various aspects of the exterior of the house. Things like structural issues, to what the house is made of, to the condition of the property are important aspects to consider when inspecting an investment property.
How old is the house?
While this is a fairly straightforward question it will help you understand what condition the house may be in structurally, and date the age of the property for depreciation.
What is the zoning and size of the land?
It is always good to know what the zoning of the property is, as well as the zoning of the land of surrounding streets. This will help you understand whether there may be an opportunity for further development in the future. The size of the land can have a huge impact on what the land could be used for, for example is there potential to add a secondary dwelling such as a granny flat? Or is the land large enough to potentially be subdivided?
What is the shape of the land?
Is the land on a steep, uneven block, or on a strange shaped block?
If so it may make it harder to expand, renovate, or add a secondary dwelling down the track.
Is the house single or double storey?
What is the house made of?
Is it brick, render, weatherboard, cladding or fibro?
Is there opportunity to paint the exterior?
If it’s brick could you render the exterior to add value to the house?
Materials can affect the value of a property. For example if a property is being purchased as an investment a brick façade may be an easier option.
- What is the condition of the brick / fibro / cladding / etc?
- What is the condition of the paint outside the house?
Has the house been renovated?
If so, is the renovation of decent quality?
Is there room for improvement / renovate?
Is the house raised or a slab on the ground?
If it’s raised:
- What is the condition of the stumps?
- What is the condition of floorboards under house?
- Are the stumps leaning, are the ant caps centred?
- Are the beams in good condition?
Are there any obvious structural issues?
We always recommend a building and pest inspection be completed during the mandatory 7 – 14 day building and pest inspection period that you add as a clause into your contract. That said you should learn to recognise the bigger warning signs that may make you steer clear of an investment property that has major issues.
- For example is there cracking in the brick which is greater than 5mm?
Is there any visible termite damage?
Again, we would recommend a building and pest inspection however it is always good to take note of where, or if, any wood is making connection to the ground. Take the time to do a thorough once over of the property and see if there are any obvious warning signs that hint of termites.
What condition is the house in?
- What is the condition of the windows?
- What is the condition of the driveway?
- Does the carport look structurally sound?
- What is the condition of the steps?
- What is the condition of gutters / downpipes?
- How does the roof look? Has it recently been re-sprayed and pointed?
How old is the hot water heater and meter box?
It is good to take note of the age of the hot water heater and meter box. If the age of one or both of these items is more than 20 years, then we recommend you negotiate a discount on the purchase price, as these items will need replacing in the near future.
Finally… Is there anything you can do cosmetically to increase the value of the house?
Will a new coat of paint make your new property look good as new? Or does the house require a lot of structural repairs and maintenance to get it up to a rentable standard?
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