When buying a home or an investment property, it can be straightforward to get caught up on everything you love about a home or unit and forget to look at some of the potential issues.
The most apparent issue you’ll run into with a property usually surrounds structural problems. These would be cracked foundations and issues with cracks in the walls, water damage, or even termites. The other major one is often the roof. Basically, small things cost a lot of money to fix.
For the most part, these types of things will be identified in a building and pest inspection, so it is always advisable to have that included in your offer. If buying at auction, it will be your responsibility to take care of this before auction day.
Air Con & Hot Water
Again, these are both relatively apparent problems that you can get checked out before the purchase. In the case of a ducted air con system, this can run into the tens of thousands of dollars to replace, so it’s worth having it inspected before purchase.
Similarly, hot water units only last a certain amount of time, so it might be worth factoring in the replacement costs if the system is old.
With TV shows like ‘The Block’ that highlight quick renovations, most people are familiar with the things you can do to spice up a property.
Unfortunately, in many cases, you are literally just painting over the cracks. Things like painted tiles in bathrooms are not likely to last for any period. And while the paint job might look nice, you’ll likely have to just deal with it down the line.
For the most part, this type of quick reno should be a red flag, or at the very least a warning that the property will likely still need work.
Public Housing Nearby
While you might have found a property that ticks all the boxes, it is also worth paying attention to the neighborhood.
If there is public housing nearby, this can significantly impact the value of a property going forward. So much so that it will likely underperform substantially all things being equal.
It’s possible to use tools such as realestateinvestar.com.au to scan the neighborhood for homes owned by the various state governments for public housing.
High Strata Costs – Hidden Fees
If you’re choosing to buy a unit or apartment, people can often overlook the high strata costs that come with owning the property.
In fact, if you are buying into a building with things like swimming pools and gyms, the costs usually are very high.
Similarly, most strata’s have what is known as sinking funds, which put money towards large projects that might arise in the future. They also will, at times, have significant capital works projects on the agenda. Especially in older buildings.
Be sure to get a copy of the last few minutes of the strata meetings and review them. You can also order a strata report, where a professional will identify any potential costs you might be forced to pay going forward. If you’re buying a unit, the small blocks (four or less) don’t always have strata fees attached to them and can represent good value.