Before You Buy an Investment Property
What to check?
If you are thorough about checking out possible problems, you may save yourself a lot of hassle later on. The main areas that you should cover are listed below. And to make it easier for you, have a look at our Buyer's Checklist.
The Property Investment
There are a number of inspection options, from do-it-yourself to professional help, for which you may wish to receive professional advice.
Check up on the following for your investment property:
- The dimensions of the land. Is it the same as what appears on the title?
- The structure of the building, for example the foundations, plumbing, wiring.
- Whether there is any part of a building that overhangs an adjoining property;
- The condition of the fences;
- The gutters, eaves, roof, exposed pipes; and
- For pest infestations (e.g. termites).
- Is there cracking?
- Any signs of rain damage or leaks?
- Any council notices about local flooding?
- Do all the electricity switches work and the state of the wiring?
- Water pressure and plumbing?
- The drainage from the bath and other outlets?
- Any signs of rising damp?
- State of the roof, tiles, and guttering?
Buying off the plan
This is a term that is commonly used in todays property market, especially for inner city apartments. 'Buying off the plan' refers to buying a property before it is completed, and this may include buying a property that is an architects plan.
It is important to comprehend the nature of this type of transaction before you enter into it. Make sure you understand (amongst other things):
* What the property will look like when it is completed
* That you have a strategy for your accommodation during the waiting period
* Whether the standard of the work will be adequate
* Whether the developer has a track record or their work is available for inspection.
The local council
Check whether:
* there is a vacant block of land next to or near the property.
* there are plans for a shopping centre development down the street;
* there are any zoning or building restrictions on the property;
* the property is properly zoned for your use;
* there are any buildings or other structures that were built without a permit.
The costs
The potential costs include:
- Property and pest checks
- Title searches and rate certificates
- Legal/conveyancing services
- Mortgage costs
- Stamp duty (you may be eligible for an exemption)
- Land Titles Office - registration fees
To ease the burden - make sure you check out the First Home Owners Grant for First Home Buyers.
