26 Feb Why do I Need an Independent Building Inspection on my Investment Property?
For most property investors, investing in real estate is all about long term financial growth and stability.
However, the potential for returns should not blind you to the due diligence required before you commit to making a purchase.
One of the most critical parts of the due diligence process is getting an independent building inspection. Below, we discuss why having an independent building inspection should be an essential element in your property investment journey.
A building inspection will uncover hidden defects
The main benefit of an independent building inspection is that it enables you yo identify hidden defects that may not be visible during a walk through.
Older properties in particular can have issues like structural damage, water leaks, electrical faults or pest infestations like termites. Unsurprisingly, these can affect the investment value and lead to unexpected costs once your purchase is complete.
An independent inspection will provide a report that highlights these issues, and which can be used to negotiate the price or even as the basis for reconsidering the investment if the defects are found to be too serious.
This is also very important for new builds. At practical completion, the inspector will go through the property to make sure everything has been finished off to Australian building standards.
For instance, has the insulation in the roof cavity been laid properly, are there any trade bumps to newly-pained walls, or have roof nails been left in gutters, where they can cause rust? These are the sorts of issues that an independent building inspector will be able to identify.
Unlock additional negotiation leverage
An inspection report isn’t just about finding problems; it can also be used as a bargaining tool.
When you have a full and complete knowledge of a property’s condition, you may then be able to use that information to negotiate a better price. Even minor issues can justify a price reduction and in cases where major repairs are needed, the savings can be significant.
This is especially important when you are investing in a competitive market where overlooking such details can cause you to overpay, producing an investment that costs you money.
Better protect your investment
Investing in property in Australia is all about preserving and growing your capital. An independent inspection is a safety net that ensures what you’re buying matches the price you’re paying.
Without this sort of independent confirmation of the value of your investment property, you risk taking on liabilities that will eat into your profits. For example, unexpected termite damage or foundation issues can mean you have to undertake extensive repairs, and this will most likely impact on your investment returns.
By having a third party, unbiased assessment of any property you are considering investing in, you mitigate aghast these and other potential risks.
Compliance and legal safety
Any property investment Australia-wide is required to be compliant with all local, state and federal laws.
An independent building inspection ensures that the property complies with local building codes and standards, which is especially important if you plan to renovate or make significant changes to the property. Moreover it will avoid future legal headaches that could arise from undisclosed structural issues or non compliance with safety regulations.
Less maintenance in the future
If you fully understand the current state of any property you are considering investing in, you will be in a better position to allow for any future maintenance or renovation costs with greater confidence.
An inspection report will help you budget for repairs or improvements, which are crucial both for property value and tenant satisfaction. Taking this sort of proactive approach will help to enhance the value of your asset over time.
Think of an independent building inspection as an investment
Regardless of whether you’re an experienced investor, or you’re thinking about buying your first investment property in Australia, your decision should be based on a thorough understanding of what you’re buying into.
An independent building inspection shouldn’t be seen as an extra cost but rather as an investment in itself, helping you to make a sound decision based on facts and data.
This will not only protect your investment but position you for a more profitable and lower risk property investment.
Talk to Power of Property about independent building inspection
If you want to know more about organising an independent building inspection, or any other aspects of buying investment property, talk to the strategists at Power of Property.
Michael Lawton and Danielle Charlton offer a comprehensive range of investor services, combining market knowledge with personalised investment strategies designed to help both new and experienced investors.
Call Michael Lawton on 0407 785 560 or Danielle Charlton on 0411 268 795, or book an online property strategy session today.