Skipping on pre-purchase inspections may save time and money in the short term,
but if problems crop up later on, you'll have the financial responsibility to cover repairs and maintenance.
Hey everyone, Tuan Duong from Duo Tax, here for another video designed to help you
become a better property investor.
Buying a property is one of the biggest financial decisions you'll make in your lifetime.
So before you sign any contracts, you want to be sure you’re buying a structurally sound property,
doesn’t have any pest problems, and has generally been maintained.
To do that, there are several property inspections you should carry out
during the purchase process to ensure that you make the right decision.
So, in this video, I’ll run through each inspection and the importance of carrying them out.
Every single inspection on this list is important, so make sure you watch until the end.
But before we start, we want to be clear that this video is for informational purposes only.
In no way should you interpret this as financial or tax advice. We always recommend working with
a qualified financial advisor or tax agent to give you the best advice for your situation.
Alright, let’s jump straight into it.
The first chance you get to inspect a property is at an open-house viewing.
Open inspections give you a chance to cast your eye over the property and see what you think.
They usually last for around half an hour and offer a great opportunity
for you to get a general feel for a property's overall quality and features.
If you can, take someone else along to help you inspect a property because having a second
perspective can help you pick out potential issues and faults you may otherwise overlook.
This is what you would call a personal inspection.
You can use this open viewing to check things like windows and doors
do they open and close easily? Or do they get stuck on the hinge?
You can look for any signs of mould on the ceilings or walls - especially in the bathroom areas.
You can look for any noticeable defects in the exterior walls, the roof or gutters.
And you could even look under the sinks to check the condition of the plumbing.
Essentially the idea is to just keep an eye
out for anything that might be a problem down the line.
Now, if you’re interested in buying the property, it’s super important to get an expert to assess the property next.
This is known as a building inspection report or a standard property report
and is usually completed by a licensed builder, a surveyor or an architect.
Their job is to ensure that the building conforms to the Australian building code.
So they’ll look at more than just cosmetic repairs or improvements and instead focus on
identifying problems that could be expensive to repair in the future. So, for example,
they could identify unsafe renovations or repairs that were done on the property.
In terms of how the inspection is carried out, they’ll visually inspect all areas of the property
for signs of structural defects or expensive problems, including the building interior,
exterior, roof, under-floor spaces and the property site itself.
They’ll look for things like cracks in the walls, problems with electrical wiring, loose or damaged
tiles on the roof to the conditions of the retaining walls and surface water drainage.
And if there is anything you picked up during the personal inspection,
you can mention that to the inspector to double-check as well.
We strongly advise getting in a third-party inspector
and not one recommended by the sales agent.
Another must-do inspection is the pest inspection.
Just like a building inspection, a pest inspection can save you thousands of dollars when it comes
to potential future repairs. If you live in an area prone to termites or other pests,
this type of inspection is essential for your peace of mind before you buy a property.
In most cases, it’s possible to get a combined building and pest inspection.
In terms of how the pest inspection is carried out, an inspector will thoroughly
investigate the property to check for the presence of any wood-destroying insects,
such as termites or borers. They will also look for any existing damage caused by those pests,
plus any potential damage they could cause in the future.
Aside from the building interiors and exteriors, trees and fences are also inspected. If pests are
present and active, inspection reports help determine what treatment should be taken.
Repairing termite damage to a house can cost you several thousands of dollars,
so a pest inspection can be the difference between buying your
dream property and buying a property that turns out to be a nightmare.
We also recommend you carry out a pest inspection every four to six months
after buying the property.
And then lastly, you have the pre-settlement inspection.
A pre-settlement inspection is one of the final steps in your property purchase journey.
It’s also sometimes referred to as a final inspection or a pre-purchase inspection
and happens just before you take ownership of the property.
The purpose of a pre-settlement inspection is to ensure that the property is in the same condition
as when you signed the contract. For example, you can check that all the fixtures and fittings
work, that any rubbish has been removed,
and that no damage has been done to the property since you signed the contract.
You should also check to make sure that all the items included in the sale are present,
like dishwashers or air-conditioning units.
If there’s a major issue with the property, then the seller will be in breach of contract,
giving you the right to withhold settlement until the issue is fixed to your satisfaction.
So those are the four most important inspections. Again,
as we mentioned earlier on in the video, this is a really important step in the due diligence
process because it minimises the risk of coming across any issues in the future.
It could also give you the upper hand when negotiating the price with the seller.
I hope you found this video useful. Also,
if you have any friends or colleagues that have just embarked on their property-buying journey,
make sure to share this video with them so that they know to cover all their inspection bases.
Otherwise, remember to give this video a thumbs up and subscribe to our YouTube channel
for more property investment tips.
I’m Tuan Duong from Duo Tax, see you next time!