As any experienced real estate investor knows, there’s nothing more exhilarating and fear inducing than purchasing your first investment property. Regardless of whether you’ve read dozens of books, listened to every podcast on the internet, and had lunch meetings with the savviest investors you can find, actually signing the dotted line on your first investment comes with a bit of apprehension and fear of the unknown.
What if I’m making a bad decision? Did I overlook something? Could I have saved more money? These questions and more will race through your head every time you buy a property, but there are things you can do to protect yourself on the frontend of a deal. Specifically, it’s important to do your due diligence and physically inspect important aspects of the home. In almost every case, this means you need to look at the following five features:
· Foundation. The single most important aspect of a home is the foundation. If you overlook something here, it’s possible that you’ll be required to fork over additional money in the future. When having the foundation examined, look for warning signs like large cracks, shifting soil, and anything that looks out of place. If something is seriously wrong, you may ask the current homeowner to look into getting the foundation repaired before you agree to purchase the property.
· Framework. While you won’t be able to tell the exact condition of the framework without cutting into a wall, you can tell a lot about the quality of the craftsmanship by examining the appearance of interior and exterior walls. Study the points where walls join together and perform a careful walk around the perimeter of the home to see if there are any cracks, rot, or mold. It’s also a good idea to inquire about what materials were used when building the home and whether or not they know who the exact builder or building company was.
· Plumbing. Don’t underestimate the importance of quality plumbing in a home. An oversight here can cause thousands of dollars in damage and repairs down the road. Search for the evidence of leaks, turn faucets on and off, examine the efficacy of drains, and inspect pipes for issues. If the home has a crawl space, you should look for any signs of damage or flooding from underneath the home.
· Electrical. Locate the main breaker or fuse box and look for anything that looks suspicious. Next, walk throughout the home to test outlets and check for ground fault circuit interrupters. These outlets can protect against electrical fires and are especially important in the kitchen and bathrooms.
· HVAC. The home’s heating and air conditioning system is a critical component. It’s one of the most important and expensive features and you should do your due diligence to make sure it’s working properly. Furthermore, check the model and capacity to ensure it’s a high quality and reliable brand.
While you won’t be able to catch everything – and should certainly use the assistance of a professional inspector – looking at these five areas can help you save a lot of time and money in the future.