One of the key things I tell my clients when it comes to investing is to ALWAYS do your Due Diligence before purchasing a property! It is essential that you do your research on the area you are looking to purchase, as well as assess the property itself. One of the best and easiest ways to carry out your due diligence and be sure the property you are looking to invest in is up to standard is through pre-purchase inspections. So what are pre-purchase inspections, and why do you need them? Keep reading to find out more!
What Are Pre-Purchase Inspections?
Pre-purchase inspections are simply inspections that are carried out before the purchase of a property, with the aim to provide the buyer with information about the condition of the property. These are super-duper important if you want to avoid buying a lemon! There are a number of different inspections you can have carried out, including Strata, Building & Pest, with each one serving a specific purpose. Personally, I recommend having them all carried out, as you want to be 100% certain that you’re purchasing the right property and won’t be on the receiving end of any nasty surprises later on. Generally, these inspections are super affordable, so it really is worth the investment in exchange for peace of mind!
Why Do I Need Them?
When it comes down to it, pre-purchase inspections provide you with some considerable benefits, including:
- Identify Defects
The decision to purchase a property is massive, so you want to make sure you know exactly what you are getting and there aren’t any hidden surprises that will set you back after purchase. A casual inspection unfortunately won’t reveal any hidden defects, and you don’t always know what to look for. Getting a formal inspection carried out by qualified professionals will give you with an accurate profile of the property, providing you with information regarding the impact the defect is likely to have over time, as well as advice on the best course of action to rectify it. Having this information prior to purchase will ensure your peace of mind that everything is up to standard.
- Assess Value
Having a pre-purchase inspection carried out will allow you to determine the true value of the property. It will provide you with valuable information about the property that you may be able to use to negotiate a better purchase price. For a first-time investor, it’s easy to be fooled into paying too much for a property. You want to ensure that you’re paying a fair price for the property and that it will hold up efficiently over the years to help build you wealth. If there are any defects, these need to be known prior to purchase so you can factor in how much they affect the overall value of the property.
- Identify Hidden Costs
If there are potential problems identified in your pre-purchase inspection, it gives you the chance to assess whether the cost of repairing them is worth it to you. Depending on what is found, you may want to step away from the property altogether, or negotiate the price down to one that reflects the cost of repairs.
- Assist With Negotiations
The information included in your pre-purchase inspection reports provide an expert opinion on any identified damage or defects in the property. You can use this to negotiate pricing, as depending on the level of damage and cost to repair, it may significantly reduce the value of the property. Having a professional report to base your negotiation off of will help ensure you get the best possible consideration of price, as the findings cannot be disputed.
So there you have it! Hopefully this has helped you understand exactly what a pre-purchase inspection is and why they are so important. If you have any further questions, be sure to leave me a comment below so I can get back to you 🙂
Until next time,