Buying your first investment property can be a daunting task, but if you follow this handy list of tips your pre-purchase property inspector wants you to know, it’ll be so much easier!
Of course, you want the best return for your investment, but if you’ve got the finances sussed, where do you go from there? What kind of property should you buy? Where should you look? What are the things you should avoid? Read our top tips including how investment property inspections can help you secure the perfect property and avoid hidden problems in the future.
What kind of investment property should you buy?
You’ve made the decision to invest in a property – now comes the hard part! You’ve got to choose a property. Easier said than done, right?
Whether you choose to go for an apartment or a house, you need to remember a few key issues before you settle on something. It’s not like you’re searching for a home for yourself, where you’ll be more willing to deal with any foibles a house may have because it’s in the right location or it might offer you the lifestyle you’re after. Your tenants won’t necessarily feel the same way about the property as you will. Instead of looking for something unique, opt for something classic with a solid build. Newly renovated properties are particularly attractive to prospective tenants.
You 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 you avoid?
When considering a new investment property, most real estate agents will recommend to look 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. You should also avoid brand new properties, as these depreciate in value over time much more quickly.
Regardless of the suburb or property you ultimately choose, protect your investment by booking a pre-purchase property inspection. An impartial, professional opinion from an inspector with decades of experience gives you the best chance of choosing a property that won’t give you unforeseen problems down the track.
What to look out for at the open home
Are you looking for an investment property in Brisbane but don’t know where to start? Here are some tips for buying your first investment property in a “Buyer’s Market”: how to identify potential issues in your prospective investment property, how sellers might cover up problems, and how to fix major issues.
When considering your first investment property, Brisbane buyers are advised to buy smart and look beyond the cosmetic fixups and cheap renovations your former owner may have employed for a quick sale.
Here are some things you might want 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 your 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 your potential investment property.
Uneven caulking or gap filler around your 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 your 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 your roof before purchasing.
While roof framing or rusty roofing can be fixed, it can be quite costly and add thousands of dollars to your 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 you can start profiting from your investment property.
If you suspect your 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 if you walk through a house before purchase, you should check under rugs where possible.
If left to spread, mould can cause your 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.
4. So much more…
When you’re doing your inspection, there are plenty of red flags to look for – including some property defects that most buyers miss.
Download our FREE Open Home Checklist to have on hand!