One question that seems to be commonly asked among those who
are interested in real estate investment, particularly in flipping properties,
is whether or not a real estate inspection is really necessary. The long and
short answer to that question is absolutely and I will do my best to explain
exactly why this is so.
First of all, a real estate inspection is the act of having
a qualified (and in many states, licensed) professional take a look around the
property you are considering and informing you of obvious and potential damage
or problems with the property. This is not something you want your uncle Bob
doing, unless of course, good old uncle Bob has had the training and experience
to know what to look for in an inspection and know what those things could
mean.
Many who are planning to flip properties enter into the
situation (particularly first time flippers) with the attitude that they know
there are problems with the property and that is why they are purchasing the property.
The problem is that the untrained eyes may miss some problems that should be
addressed before moving along to other problems.
For instance, if there were obvious signs of plumbing
problems that could result in a leak behind the wall, you wouldn’t want to
paint that wall or replace the floors until you had the possible leak checked
and either confirmed or denied and repaired if necessary. Otherwise you would
likely need to undo the work (wasting both time and money) that had already
been done by the time you found out about the leak that a competent inspector
would have told you about before you even began working on the property.
Inspections are great before placing the bid on a house
because they actually give investors a bargaining chip. For the true (at heart)
investor this is a fact that simply cannot be ignored as it directly affects
the bottom line price. If the roof needs to be replace you are justified in
offering a lower amount. If the electrical system needs to be updated, this is
something that should be adjusted or amended in the final offer. These are also
things that are easily identified by a qualified and competent property
inspector. Any thing that can save time and money is great when investing in
property and an inspection can do both.
Another great thing about a good property inspection is that
it often sheds light on the amount of money that will be needed in order to get
the house in good working (or flappable order). Knowledge is very important in
this line of work and can mean the difference between taking on a project (if
the repair budget won’t exceed the eventual value of the property) or walking
away if the expenses would be too great to turn a decent profit. As an investor
you should never take on a property that is pretty much guaranteed to be a
failure, it is simply not a wise financial move to make. It doesn’t matter how
much the property calls to you on a personal level in the business of investing
the bottom line is the only call you should be taking.
More importantly however than any of the things mentioned
above, a proper home inspection can inform you of potentially hazardous
conditions within the home that the untrained eyes may not take notice of. Some
of these things include toxic mold, which can be financially disastrous as well
as hazardous to your health; foundation issues, and structural damage that is
threatening the integrity of the property. An inspector should also notice the
structural integrity of homes that could affect your home if they are weakened
or fail all together. While these things seem so simple, it is often the simple
things that lead to the greatest disasters. Whether or not you realize it, a
good home inspector is one of the best tools you can have in your arsenal when
it comes to flipping real estate as an investment venture.
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