Should You Get A Building and Pest Inspection On Your Investment Property?
Recent stats that I have seen have stated that at least 30% of properties in Australia have problems that cost the buy thousands of dollars to fix, yet less than 20% of purchasers actually get a building and/or pest inspection.
What are the benefits of getting an inspection?
A building and pest inspection can bring up issues with the property you are about to question. If there are drainage issues, structural issues or things that are on the verge of breaking then the building inspection will raise these concerns. If there is a cockroach, termite or other pest infestations then the pest inspection will show you the problems.
Knowing the problems before you buy can allow you to bargain with the seller. You can bargain on price, but most buyers simply require the seller to fix the problem in question before settlement.
This means less maintenance costs for you in the first few years of owning the property. It also makes you aware of potential problems so you can avoid them in the future and save even thousands more.
Why would you avoid an inspection?
The main reason people avoid a building and pest inspection is generally the upfront cost. A building inspection will probably set you back $200-$400 and a pest inspection will cost about the same.
Many buyers and stretching their budget to the brink in order to afford a property and they would rather put that $400-$800 towards their deposit instead of into an inspection. But it is likely they will have to spend that money (or more) towards fixing the problems that could have been corrected before settlement if a proper inspection was completed.
In a sellers market there are also concerns that if an issue does come up then you might lose the property all together. However, due diligence inspections usually occur during the cooling off period, so you have time to make decisions before the seller can sell the property to someone else.
Should You Get An Inspection?
I can’t tell you to get an inspection or not to get an inspection, you need to decide that for yourself.
A building inspection is like insurance against your worst case scenario. If there are serious structural issues that are going to cost you tens of thousands of dollars then it is likely you will need to rethink the investment. Building inspections are a good way to insure against these major problems.
If you are investing in a unit and the body corporate doesn’t have a sinking fund (or a small sinking fund) you may want to get a building inspection. Some maintenance work completely unrelated to your specific unit might need to be done, and despite the fact that you have only owned the property for 1 month, you may have to fork out tens of thousands of dollars.
If you want to minimize your risk then it is likely that you will want a building and pest inspection. If you have room to move then I would ask “What’s $400-$800 in the scheme of things to protect yourself against major structural problems.”