When Should Investors Do a Property Inspection?

Frank Chen

Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I've got a quick video on things to consider when ordering a home inspection.

As investors, we are always faced with the question of whether or not we need to order a home inspection for investment properties we are interested in buying.

And in many cases, the real question isn't how much it cost, but usually how long it will take, as in, How long will it take to schedule an inspection? Most of the time a few days, but could take up to a week.

When you're bidding on a HOT deal, you have to move fast, and sometimes a home inspection contingency may delay that process, and in situations where the seller knows you won't like what the inspectors find, they'll choose an offer that doesn't have the inspection contingency over one that does.

So let's dive into some key factors to consider before ordering a Home Inspection

1) For Sale or For Rent?

Looser standards for rent – I'm not saying its ok to be a slumlord.
Rental properties – update progressively when you have tenants to where its ready to sell
Renters – depending on your target audience – may not care about moving into a “perfect house”
Just needs to be move-in ready, and liveable under city standards.

2) How Old Is the House?

Most newer homes will not require an inspection – New = 5 years or less
Still use your judgment and inspect the overall condition of the home – Roof and Foundation
10-15 Years – average risk – depends on maintenance
20 Years – High Risk – Roof, appliances, air conditioning units, furnaces, water heaters, usually have a 15 year shelf life.

3) Have There Been Any Recent Updates or Big Jobs done?

Electrical work? How long ago?
New roof? How long ago?
Foundation work?
Plumbing work?
If most “big jobs” have been updated within 5 years, good sign.

4) Experienced or Novice Investor?

Novice investors should use inspectors almost always
Especially if you are unfamiliar with what to look for

5) Review The Seller Disclosure

Not very helpful in my opinion – at the sellers/residents discretion – not 100% accurate
But if it's detailed, good reference point

6) Find a Credible Home Inspector that is Insured?

If anything is found wrong after purchase that the inspector didn't catch, they can be liable.

Home inspections are one of the main things real estate investors can lean on to reduce their risk. Regardless of your experience level, there are simply some things you can't see, like the stuff behind the walls, underground, it's always better to be safer than sorry.

Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you'll be automatically notified when we upload more quick video tips for you. Take care and good investing.