The hidden problems with property purchases

Are you looking to buy a new home or investment property? Property-Investment-Checklist-300x199

Well, don’t make the same mistake many buyers do and overlook identifying hidden problems that you may overlook in your excitement.

I remember reading a survey by St.George Bank a few years ago that showed the average Australian home buyer spends more than seven months searching for a property, does around 90 hours of real estate-related research, inspects 12 about properties before finally settling on a purchase – yet most spend only an hour inspecting the property they eventually buy.

This means most people will look at a new car for longer than they inspect the home they eventually buy.

The survey also found more than half (55%) of Australian home buyers said they discovered hidden problems with their homes after moving in.

Here’s a list of the top 10 problems buyers discovered

  • Plumbing problems 28%
  • Poor TV reception 23%inspection house report pest check building property
  • Bad mobile phone coverage 20%
  • Noisy neighbours 19%
  • Cracks in the walls or floors 18%
  • High speed internet not available 16%
  • Parking on the street is difficult 10%
  • Rising damp 8%
  • Future developments in the area 8%
  •  Insufficient parking onsite 8%

Now, this survey was conducted a few years ago, but it’s likely the finding would be much the same today.

Here are some of the things I check for when inspecting a property:

I look for things like:

  • Is there any obvious crack to the external walls, is the roofline sagging or are there signs of foundations cracking.
  • I check the power board in the electricity box. Is it relatively new? Has it got a circuit breaker? If the board is original and old this may mean that the property is due for rewiring.
  • Have recent painting works covered up a few defects?
  • Are the floors sagging floors or creaking? This may indicate problems with the stumps or bearers.
  • Is there a musty smell that could indicate rising damp?
  • I check the water pressure by turning on the taps and the working condition of the various appliances including heating and cooling.

If there is a tenant in the property and they happen to be able to chat, I like to ask them a few questions – you’d be surprised what they come up with.

If there’s nothing obviously wrong with the property the next step is to get a professional building and pest inspection done.

What if the pest and building inspection show lots of problems?

I’ve seen buyers freak out over building reports, especially with older homes, but I’m not suggesting you look for a perfect scorecard because you’ll never get it.

The building inspection is meant to identify all necessary repairs and it allows you to rule out properties with serious defects.

The purpose of the building report is to tell you every single thing that could be wrong, so it can look pretty scary.

And it’s likely to be detailed and has a lot of disclaimers.

Of course, if you’re unsure about what it all means you can always talk to the inspector and share your concerns, as they’re working for you – not the vendor.

What does all this mean? 15563628 - house and question 3d image

When inspecting a property you’re likely to purchase, you should always be on the lookout for obvious defects.

If you identify any major problems, it might be best to give that property a miss rather than buying someone else’s problems.

However, problems brought up in a building and pest inspection don’t necessarily mean you avoid the property.

It’s a bit like buying a used car – there will always be dings and dents, so don’t look for a perfect scorecard because you’ll never get it – and you’ll end up never buying anything.

The aim of conducting these inspections is to identify problems so you can go into your purchase with your eyes wide open and minimise surprises down the track.

Of course, you can always use the defects as ammunition to negotiate a better purchase price!

Now is the time to take advantage of the opportunities the current property markets are offering.

Metropole Team

Sure the markets are moving on, but not all properties are going to increase in value. Now, more than ever, correct property selection will be critical.

You can trust the team at Metropole to provide you with direction, guidance, and results.

Whether you’re a beginner or an experienced investor, at times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s exactly what you get from the multi-award-winning team at Metropole.

We help our clients grow, protect and pass on their wealth through a range of services including:

  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now! Click here to learn more
  2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $4Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney, and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment-grade property.  Click here to learn how we can help you.
  3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
  4. Property Management – Our stress-free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years, and our properties lease 10 days faster than the market average.
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About

Brett Warren is Director of Metropole Properties Brisbane and uses his 13 plus years property investment experience to advise clients how to grow, protect and pass on their build their wealth through property. Visit: Metropole Brisbane


'The hidden problems with property purchases' have 3 comments

    Avatar for Brett Warren

    April 20, 2017 Ellie

    These are all great tips! Thank you for sharing this very informative article. This gave me an idea of what to check for when my husband and I go house hunting sometime the end of this year. Currently, our inspection skills are limited to checking if the house smells musty, if the water pressure is OK, if the mobile phone coverage is good, and if the cooling system works. Those were problems we encountered in our previous rentals. Of course, we’ll have a professional home inspection done on the shortlisted properties. Hopefully, we’ll have fewer issues with our new house when we finally purchase one.

    Reply

    Avatar for Brett Warren

    March 23, 2015 Ray White Property Management Bunbury

    These are very good tips that not only home buyers but also home renters will find very helpful. Great site!

    Reply

    Avatar for Brett Warren

    January 2, 2015 John O'Grady

    Talking to the tenant will certainly bring forward opinions that the agent will
    not express. They should, however, be treated with caution. Usually,the tenant
    has a seriously vested interest in your NOT buying the property. If you do,
    the tenancy will probably be terminated and he/she will need to move house.

    Reply


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