Buying investment properties can be a daunting task, but by following this handy list of tips from the pre-purchase property inspector, it’ll be so much easier!
Of course, a buyer wants the best return for their investment, but if they’ve got the finances sussed, where do they go from there? What kind of property should they buy? Where should they look? What are the things they should avoid? Read these top tips, including how investment property inspections can help in securing the perfect property and avoid hidden problems in the future.
What kind of investment property is worth buying?
Whether someone chooses to go for an apartment or a house, they need to remember a few key issues before they settle on something. It’s not like they’re searching for a home for themselves, where they’ll be more willing to deal with any foibles a house may have because it’s in the right location or it might offer them the lifestyle they’re after. Their tenants won’t necessarily feel the same way about the property as they will. Instead of looking for something unique, opt for something classic with a solid build. Newly renovated properties are particularly attractive to prospective tenants.
They’ll also want something very low maintenance. Typically, small properties are the easiest to maintain. They also run a much smaller risk of containing unseen faults like leaking roofs, unsound structures, asbestos or serious damage. It’s also about how easy the property is to maintain, and whether it’s been properly looked after previously.
What should be avoided?
When considering a new investment property, most real estate agents will recommend looking for something about 15 to 20 kilometres from the city centre, with good land value and vacancy rates below 3%. Avoid properties commonly known as ‘fixer-uppers,’ apartments with huge body corporates, and suburbs or neighbourhoods that are rundown. Buyers should also avoid brand new properties, as these depreciate in value over time much more quickly.
Regardless of the suburb or property that's ultimately been chosen, protecting the investment by booking a pre-purchase property inspection is vital. An impartial, professional opinion from an inspector with decades of experience gives buyers the best chance of choosing a property that won’t give them unforeseen problems down the track.
What to look out for at the open home
Considering looking for an investment property in Brisbane but don’t know where to start? Here are some tips for buyers looking for their first investment property in a “Buyer’s Market”: how to identify potential issues in their prospective investment property, how sellers might cover up problems, and how to fix major issues.
When considering their first investment property, Brisbane buyers are advised to buy smart and look beyond the cosmetic fixups and cheap renovations their former owner may have employed for a quick sale.
Here are some things to keep an eye out for when inspecting a new investment property, and what you can do to fix them.
1. Sagging
Sagging roof lines, cracking in ceiling or walls, and doors or windows that just won’t close properly are probably one of the key indicators that there is a major issue with the foundations of a potential investment property.
Uneven caulking or gap filler around the windows or doors may just be signs of a shoddy renovation. However, it could also signify a cover-up and there may be major foundation issues.
A roof should be arrow straight, so if these things are present in the potential investment property, it may be a sign of poor roof framing. Rusted roofing can be easily covered up with paint, so it’s important to check the underside of the roof before purchasing.
While roof framing or rusty roofing can be fixed, it can be quite costly and add thousands of dollars to the renovation budget. It’s also not something that can be fixed overnight. Often, the house will need to be empty before the framing can be replaced, which will impact on how soon the investment property can turn a profit.
If it's suspected that the investment property may have roof framing issues, arrange an inspection with a structural engineer.
2. Rot
Rot, mould, and water leaks may seem like issues that can be easily fixed. However, left untreated, they can cause major structural damage as the wood framing and support beams decay. It’s also easy to cover up with paint, so what began as a small issue can turn into a major problem.
When purchasing a new property, look for cracks in the ceiling, old water patches, and soft or spongy areas in the flooring. If the problem exists in the flooring, it can be covered up easily by a rug, so when walking through a house before purchase, always check under rugs where possible.
If left to spread, mould can cause tenants to become very ill very quickly, so it’s best to fix this problem as soon as possible.
3. Electrical Issues
Electrical issues can be a little bit more difficult for sellers to hide or cover up. Sometimes fixing the issue can be easy, sometimes it can be a sign of a larger issue, such as home handyman wiring. Some indicators are:
Flickering lights
Loose outlets
Burning smell
Defective burnt outlets
DIY electrical work can be extremely dangerous, so consult a qualified electrician and arrange for a thorough house inspection to determine any major issues.
