March 1, 2013
As a property investor, you will evaluate a property in a very different way than someone who is shopping for his or her future home. That is, you will buy a property with much fewer emotional attachments and more logic as you hunt for a highly bankable property. But even if you are using your shrewd business mind when looking over a property, it’s possible you are not being thoroughly diligent and taking care of certain issues before buying it.
Inspect the Property
Being cautious about an investment property means you must take care to hire a third party to thoroughly inspect the unit. Inspection is absolutely vital to you potentially saving hundreds and even thousands of dollars in damages such as mold, a damaged roof, water leakage, i.e.: the typical property problems owners may fail to disclose to you as you look over a property. It is important that you contract a professional inspector to inspect the property before escrow closes. All real estate agents will be able to recommend you an inspector, but you can always check the American Society of Home Inspectors (ASHI) for a reliable inspector. All the members of ASHI must meet organizational standards and pass exams as well as keep to a built-in system of checks and balances. But make sure to check the references of every inspector you evaluate – the inspection phase of buying a property is so critical to your business that getting the right inspector is key to you potentially saving a lot of money in the future.
When To Inspect
The best time to carry out the inspection is after you’ve made an offer. And if the inspection turns up information that forces you to drop the property, make sure your real estate agent builds in a contingency to enable this to happen. If you opt to have the property inspected before you make an offer – you can do this – remember that you will have to pay for the service, which may set you back considerably even before you make the offer (others may bid on it in the meantime).
Make sure the seller gives you a full disclosure before the inspection takes place. This will help you stay abreast of all problems that may or may not be detected during an inspection. Be sure to acquire this information before the inspection so that your inspector can carefully inspect the problem areas in the building. Take care to remember, however, that sellers will only give you a disclosure to the best of their knowledge – there may be issues with the unit that even they may not be aware of.