When you are looking at investment properties sometimes you have to move quickly to snap up a great deal. Newer investors AND experienced investors should always get a home inspection whenever possible.
There are some situations where you need to make a quick offer in competitive markets or even go all cash unconditional. What can you do to make sure the property is sound? We recommend bringing in an experienced contractor and some of your trades people to do a walk through at a bare minimum.
(We do not suggest making unconditional offers unless you are very experienced and are comfortable dealing with any issues that may come up with the property.)
This will give you valuable information on what risks there could be with the property even if you are in a bit of a rush to get that offer in. The best deal is often the one you DON’T do….which means you didn’t make a mistake and wind up with a very challenging deal!
We will often make offers conditional to viewing satisfactory to the buyer, which will not give you the same coverage as a home inspection condition – but this still allows you to walk away if you and your team find something that seems risky about the property such as plumbing concerns.
Water is the nemesis of all landlords and investors of all real estate strategies. Nothing other than a fire can cause more damage quicker than water damage, insurance companies also hate water damage because that causes them more payouts in claims than many other losses.
Damage from water can happen from more than just the plumbing though, including sewer backups (gross I know but it happens more often that people want to admit!) flooding, and rain coming in around windows or through the roof. We recently saw a property in Calgary that had a woodpecker that poked a hole in the roof causing a leak!
What are the most common water damage risky items to watch out for?
- Leaking or improperly installed fixtures (that includes toilets). When fixtures are old or improperly installed by happy home owners doing things themselves they can leak behind walls and through floors going unnoticed until these issues have damaged drywall/floors/ceilings causing mold which could need remediation and those costs add up fast.
2. Basement windows without proper drainage – window wells have building code requirements that mandate proper drainage and slope to move water/snow away from the window so that water does not flow toward the house leaking through windows into the house.
Often new landscaping or walkway construction will change the grade to slope toward the house causing water to leak through the windows – which are not waterproofed to heavy water flowing directly toward them.
Window wells that are too shallow or do not have drainage can fill up with snow or rainwater and cause leaking into the house, this can allow lots of water into the home causing major damage and if left undetected can also cause black mold in the home behind the drywall.
3. Sewer backups – in some cities there are flood prone areas or even in areas with higher elevations under heavy rainfall conditions with older waste water pipelines backups can happen from the city sewer. What that means is that high pressure can force the gray water back into the house up through toilets and drains ….Gross I know but something that needs to be considered. A good mitigation for this is a back-flow valve which prevents the gray water from flowing back into the house’s pipes under these heavy rainfall/flood conditions.
Water, we all need it it can be our enemy as real estate investors if we are not careful. Do your homework on the water risks, ask the professionals when in doubt and maintain the plumbing systems in the property and you will avoid costly repairs and higher insurance bills.
If you have questions about how to due your due diligence or how to value these repairs contact our team to book a discovery call and let’s chat.
To your success,
-Respect The Hustle