One of my favourite mantras in property investing comes from Rick Otton: “It’s all about the cash flow!” And indeed, investing in property is only worth the effort if you are making money.
Even those investors who buy houses that need fixing up before being placed back on the market have a limit to what kind of damage they can take. If you buy a house that will cost you almost as much as it would to build a new one, why not just build a new one and save yourself the trouble?
In fact, if it is the location you want, you can simply tear the old house down and have a new one built at a more reasonable price than it would take you to repair that old house. Plus, the new house has a much longer lifespan now.
Forgive the tirade, let’s get back to the topic at hand. If you are looking for a house, maybe even an HMO property, there are certain things that you need to keep an eye out during house showings. Things that could raise red flags and give you some kind of warning as to what you are getting yourself into with that purchase. Here is a quick list of those things:
Overall look of the exterior
Take a good look at the exterior of the house. Are the walls chipped? Are there signs of asbestos siding and mortar chipping between the bricks? These are things that will demand more financial input later on because they will need to be repaired. Look at the roof and ask how old it is – if it is over 15 years then you know that you will soon need to replace it as well. Check the chimney and make sure that it is in prime condition.
What about the inside?
The very first thing you should do when you walk into a house being shown is to take a deep breath. See if you can smell hints of pet urine, mildew or mould. If the house has too much air freshener then it might be a sign of the seller trying to mask these odours. Look around for signs of mould and mildew behind couches or in the basement. See if the ceiling is cracked or has water stains. This indicates a leak in the roof, which means more repairs and in extreme cases, roof replacement.
Inspect the plumbing
This is one of the biggest issues when people buy new houses. The state of the plumbing is not something you can play around with at all. If there is anything wrong here, you know for a fact that you will have to spend more money repairing it even before you move in. Is there running water? What is the pressure like? Do the toilets flush properly? Is the kitchen sink draining well? What kind of hot water heater does the house have? Is it a newer or older model? Check to see if it has copper water lines. These are preferable to galvanised lines that block with age.
What about the electrical wiring? Is the house properly wired? Is the HVAC working in good order? What about the overall structure? Do the floors creak or the stairs make weird noises when you step on them? Are the windows insulated? Do they open freely and seamlessly? Do the doors have excellent locks (although these can be easily changed to your preferred locks)? These are all things you need to thoroughly inspect during a house showing.Tags: property showing, what to look for in a property showing, what to look for when buying a house