When buying an investment property, you have to get the property inspected by a professional to make sure you don’t miss important issues that could break the deal. However, before you do this during your due diligence period, you must perform your own inspection when you tour the property, then make an offer. So, here’s the ultimate investment property inspection checklist every real estate investor needs.
Inspecting investment properties helps protect you from loss and negotiate a lower price. Follow this investment property inspection checklist every time before you make an offer.
This list covers most of the issues you’d find with most houses, and it’s simplified so you can easily use it in your business
Why do you need an inspection for your investment property?
Investment property inspection is one of the most important steps in real estate investing. When you get used to it, you can walk in and out of a house in just 10 minutes, and pick out all the necessary info you need to estimate repairs.
The goal is to make a profitable investment when buying properties. Why not minimize the costs involved as much as possible, while making sure you’re getting a solid investment?
This is what your own home inspection helps you do.
Here are the top reasons why you need an investment property inspection.
- Negotiating with the seller: – When you find repairs and issues that need to be fixed during your home inspection, you can use this information to negotiate with the seller for a lower price.
- Avoiding a bad deal: – the only way to know if it’s a good deal is for you to inspect it. An investment property that needs tons of repairs you didn’t expect can eat into all your profits pretty fast.
- Safer for tenants: – If you’re going to have tenants in the property, you’ll want to make sure the house will hold up in future without issues.
The ultimate investment property inspection checklist
It’s important to take your time when doing your inspections. Equally important, be sure to carry all the tools you need for successful inspection.
The easiest way is to identify the major and minor issues on the property so you can quickly make a decision if it’s worth it or not.
We’ll look at the general areas of inspection, then look at specific rooms found in most houses.
General areas of inspection
- Foundation or structural problems: – these are the most expensive problems in most properties. Signs of these are cracks on the walls, tiles and concrete floors, and floors that are not level.
- Roof problems: – Roof replacement can be quite expensive, often over $15,000 – $20,000. A bad roof can be detected by leaks on the ceiling, un-even shingles that can be curling or buckling. The chimney should also be in good shape.
- Plumbing problems: – Plumbing leaks can cause serious structural issues and mold infestations.
- Mold and mildew damage: – If you’re buying in a wet climate this should be on your investment property inspection checklist. Some damage may be obvious, but other times it starts inside walls.
- Appliances: – Major appliances like AC can be quite expensive to replace. Check stickers on the appliances to find the date of manufacture. Usually they run 15-20 years before they need some major service or replacement. A furnace will run 15-30 years.
Now let’s look at specific investment property inspection checklist for each room:
- Cabinets / Drawers: – Open all of them. Do they open and close smoothly? Do they show any signs of wear and tear like they need replacement?
- Oven: – Does the oven open slowly to show the springs still work? Does it work?
- Stove: – Make sure all burners work properly.
- Dishwasher: – Open and inspect the dishwasher to make sure it works properly.
- Sink faucet: – Should have good water pressure.
- Garbage disposal: – Make sure it runs properly.
- Countertops: – Make sure they look good and not chipped on the edges.
- Tiles: – Check to make sure if they’ll need replacement.
- Windows: – Open and close all windows to make sure everything works.
- Toilet: – Make sure it functions properly. Assume you need to replace all toilet covers.
- Plumbing/Drainage: – Test the sinks and tub to make sure the water flows through.
- Tub: – Check to make sure it has no chips
- Tiles: – Make sure there are no broken tiles.
- Ventilation: – Does the fans work properly?
- Closets: – Make sure the doors open smoothly.
- Windows: – Check to make sure all windows open properly.
- Flooring: – Make sure the flooring and carpet are in good condition.
Basement / Crawl Spaces
- Odor: – does it smell like mold or mildew?
- Ventilation / insulation: – Make sure this is intact.
- Walls: – Any cracks on the walls?
- Garage door: – Does it open and close easily?
- Outside lights: – Make sure they all work.
- Sprinklers: – Turn on the water to make sure they work.
- Lawn / Yard: – Are they in good shape? Any dead trees?
Summing up the investment property inspection checklist
This inspection checklist is a summary to help you with your inspections when you go to see investment properties. However, it’s not a substitute for a professional inspection, but it gives you a pretty good idea of what repairs are needed.
Use this investment property inspection checklist to negotiate your offer.
If you find too much damage, you may decide to let the deal go even without hiring a professional inspector.
The whole point of this inspection checklist is to give you more confidence as a real estate investor. Getting a good investment property starts with a good inspection. Use this investment property inspection checklist to assess the condition and true value of your investment properties.
Eventually, once your offer has been accepted and you get into your due diligence period, then you can hire a professional inspector. You can find inspectors in your area from your local REIA groups. Look for Facebook groups for real estate investors in your area, or search meetup for such groups.
I wish you success in your investment deals!