Starting your rental business: The importance of a home inspection

You know the saying “buyer beware.”  This is true, not only when you buy your personal residence, but is equally important when you buy an investment property!   There are several reasons to make a home inspection part of your home buying experience:

  • identifying issues
  • evaluation of the seriousness of issues
  • possibility of negotiating the price down when issues are discovered
  • Time and budget management for addressing issues

 

A home inspection is an important part in choosing the right rental property

Photo by Pixabay on Pexels.com

Unfortunately, a seller may be hiding a problem from you.   And, of course, there could be a problem that the seller doesn’t even know about! Laws concerning damage vary from state to state, and of course from country to country.  But, even in areas with strong consumer protections, some sellers will still hide issues, hoping that you won’t notice, and knowing that it’s hard to prove prior knowledge and intent.  You don’t want to be in a situation where you need to spend time and money fighting the (now) previous owner.  Or having buyers’ remorse.

Although an inspection won’t uncover everything (it’s impossible, for example, to see what’s inside the walls), a good inspector will find most problems, and advise on potential future issues.

picture of worker and checklist or contractWhen issues are discovered, you can negotiate the price of the property down or arrange for repairs to be made before closing, whichever you and the sellers are most comfortable with.  Also, knowing what repairs need to be made helps with time management and budgeting.

Here are some key questions to ask yourself after receiving the inspection report: Do the repairs need to be done right away (most will fall into this category, for either safety, maintenance, or aesthetic reasons) , or in the next few years (the hot water heater is old, and may not last long)?  What is the estimated cost?  An honest estimated cost?  Will you have enough money to cover the costs, before you start bringing in income?  How long will the repairs take, and will they interfere with putting the property on the market?  Major repairs such as new wiring or plumbing, regrading the yard, or fixing a foundation could take quite awhile, and repairs can’t start until you have the keys.

Knowledge is power!

 

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