Everyone knows that getting a home inspection when buying a home to live in is extremely important. But what if you are an investor? Still need a home inspection? The answer is most likely YES! This is especially true if you are a less experienced investor.
Whether you’re planning to buy and hold property or you’re a pinballer, including an inspection clause in your contract gives you a way out if you find something that’s completely unexpected and can be very expensive to repair. It also gives you a bargain chip if you need to go back to the seller to adjust your original offer.
Many investors who are planning to sell property go into the situation (particularly first-timers) with the idea that they know there are problems and that is why they are buying the property “so cheap.” They made an offer on the property without taking the proper steps to determine if it really is a good investment. This is almost certainly a recipe for disaster.
An experienced investor can usually walk through the house and have a pretty good idea of the visible or obvious work that needs to be done. It is those things that are hidden or very technical in nature that usually require a trained inspector to discover them. Very few of us are competent to know if an oven is working correctly and safely. Now you can say, this oven looks like it’s a hundred years old and I know I’m going to replace it. Alright. You can skip the oven inspection. If the electrical system is going to need to be upgraded, this is an expensive item to factor into the property’s rehab costs. It is certainly something that needs to be fixed before cosmetic work on the property begins. These are just a few examples of potentially significant expenses that may be uncovered in a home inspection. Failing to perform a pest inspection before finding a retail buyer has derailed more than a few closings.
The good thing about an inspection is that it will shed some light on the scope of work that needs to be done on the property. You can get a good idea of the amount of money needed to keep the house running smoothly from the inspection. Having all the facts can mean the difference in buying a property that will make a decent profit or walking away from one that is sure to end in failure. It is necessary to always remember that this is a business. It doesn’t matter how much the property calls you. This is not the time to fall in love with a particular property and make a decision based on emotions. The bottom line is really all that matters to a savvy investor.
More important than any of the things mentioned above, a home inspection can alert you to any potentially dangerous or unsafe conditions in the home that untrained professionals may miss while walking through the home. These could include mold (often hidden), asbestos, lead, carbon monoxide or radon (both colorless and odorless), or even subtle but very serious structural problems that could cost you tens of thousands of dollars. Whether you realize it or not, a professional home inspector can end up saving you thousands of dollars and even save you from having to go through expensive litigation related to dangerous situations that may be discovered at a later date.