When purchasing a property, a thorough inspection is essential before making the decision. Regardless of whether the property you intend to purchase is your dream home or an investment, inspection before closing the deal helps to detect significant underlying problems. Here are some basic tips on inspecting a property before making a decision.
1. Location and neighbourhood
The location of a property and its surrounding neighbourhood directly affects its potential tenants. For instance, if the property is located close to universities, tenants are more likely to be undergraduates. As such the property might be vacant during term breaks. On a similar note, if you purchase a property where there is a hospital nearby, doctors or nurses may be your potential long-term tenants. (Watch funny video about knowing your neighbours)
2. Public security
Nobody wishes to live within the vicinities of crime hotspots. Therefore, it would be best to obtain public security data from the police, or do some research on the internet for relevant information. You may also survey the distribution of local police forces and the frequency of patrols. (Read more on safety features)
Facilities are one of the main factors which homeowners and potential tenants consider. Hence, it would be ideal to see if there are any parks, malls, stadiums, schools, hospitals, public transportation or other facilities nearby that can attract tenants or make life more convenient. If there are new property developments within the vicinity, flyers or leaflets of those properties can provide useful information with regards to this matter. (Read more on neighbourhood amenities)
4. Natural disasters
The insurance of a property must be taken into consideration as it is part of your investment cost. If your property is located in areas prone to landslides or floods, you will have to pay for extra insurance premium, which may substantially reduce your rental revenue. Furthermore, a property located in areas prone to natural disasters might not be attractive to prospective tenants.
5. Environmental issues
Health and safety are key factors to deciding whether the property is situated within an ideal environment. Given a choice, most people choose to avoid living in neighbourhoods where there are serious air and noise pollution, as well as heavy industrial areas. Thus, it is important to ensure that these problems are at a minimal in the area of your intended purchase.
1. Building structure
The structure of the building, such as the foundation, beams, columns, wall segments, ceilings, walls and roofs must be inspected thoroughly. This is to ensure the safety and durability of the property’s structure. You may conduct the inspection personally, however, hiring professionals to do so would be a safer course of action.
2. Drainage pipes
Inspecting drains and pipes might sound silly but this is an extremely crucial step. The simplest way to perform this check is by filling up all the sinks and bathtubs (if any) in the house, then releasing the water all at the same time.
Though it may seem simple, replacement of windows is neither fun nor cheap. Hence, try opening and closing all windows to ensure that they can be done so smoothly.
4. Tap water
Water supply to properties may not pose any major problems in terms of cleanliness, however, what you need to be cautious of are old and rusty internal pipes. To assess, pour tap water into a glass. If the water is murky or gives off odour, then you might need to install a water filter.
5. Toilet and water taps
Be sure to flush all toilets in the property, as well as open all taps to ensure that they are functioning.
6. Power distribution box
Open the power distribution box and run a quick check to make sure that all cables within are neatly bound. Messy wires could ring trouble in the future. If there are any unconnected or loose cables, be sure to check for live electrical wires within the walls.
7. Water heaters and air conditioners
Inspect water heaters and air conditioners by turning them on and trying out the different temperatures on the thermostat. These electrical appliances are most frequently used in homes and thus, should be checked to ensure that they are in good condition.
Problems being swept under carpets is not just a figure of speech. If the property comes with carpeted flooring, make the extra effort to check under the carpets for mildew or damages hidden beneath.
Purchasing a property is a complicated process. Hence, having the relevant knowledge, wisdom, and experience is essential in addressing different problems. As such, meticulous inspection of a property before finalising your decision to purchase is paramount in reducing risks and avoiding unforeseen problems and expenses in the future.
About the Authors
Dr. Ong KL and KC Lau
They both co-founded the first online real estate investment courses in Malaysia www.PropertyMethod.com
Dr. Ong Kean Leong (often referred to as Dr. Ong KL) is a real estate investor for many years, he is also the developer of GoFinance™ (GoFinance™ is a software tool to help real estate investors make quick and accurate assessment of an investment project). He is also the main speaker for www.PropertyMethod.com and blog owner of www.REIJB.com (real estate investment blog).
(Translated by: Yau Yin Wey, 30th August 2016)