When you first start real estate investing, you’ll quickly discover that the process isn’t always straightforward. While becoming an investor is certainly worthwhile in the end, there are bound to be unexpected barriers to remove and hoops to jump through along the way.
Of course, referring to some of the top real estate investing tips will help you avoid delays that could jeopardize your profitability. Taking time to do things right might seem like a slow way to build real estate investment wealth, but it pays off in the long run.
One good example of this is a property inspection. Although many buyers are waiving home inspection contingencies to strengthen their offers in an ultra-competitive market, that doesn’t mean you should follow suit when investing in real estate.
Let’s examine why these inspections are crucial and why building a relationship with a property inspector can benefit your investment property business.
Why You Should Never Skip a Property Inspection
It’s becoming more common to waive home inspections when submitting an offer on a property. Because competition is so stiff for prospective buyers, they understandably want to do everything they can to appeal to the seller.
Unfortunately, this tactic can often backfire. It might get you the home and save you some money upfront, but you could unknowingly purchase a money pit. Even if the house appears to be in good condition and the seller doesn’t disclose any significant issues, you may discover significant problems with the property after closing.
Forgoing a property inspection is risky enough when you’re buying a home for yourself. However, as a real estate investor, skipping an inspection can come with even costlier consequences when choosing rental properties or fix-and-flip homes. You may think you’ve found the deal of a lifetime, but without an official inspection, you won’t realize the potential liabilities involved in your purchase.
For investors, skipping out on an initial inspection can cause sales delays, surprise expenses, and safety issues. These problems can disrupt your ability to turn a profit or even invest in other properties in the meantime.
The Benefits of Obtaining an Inspection For Your Investment Property
We’ve covered the risks involved in skipping an inspection, but what are the advantages of taking this extra step (and covering this additional cost)? Having an inspection performed before you purchase a rental property or your next house to flip can help your business thrive in several ways. Let’s discuss a few of them below.
Assess the Property’s Worth
When Privy scours the real estate market and sends potential properties your way, you might be ready to make a great deal right away. However, an inspection can tell you whether a property is actually worth the investment. If an inspector discovers that the property requires significant improvements—or that the cost of renovation will exceed the value of the property—that inspection cost will be money well spent. Rather than sink tens of thousands of dollars into a property that’s beyond repair or that won’t yield a positive ROI, you can move on to the next opportunity relatively unscathed.
Observe Potential Problems
A reliable property inspector will also be well-versed in areas where you might lack knowledge. An experienced inspector will check every aspect of the property, including the plumbing, wiring, foundation, ceiling, basement, attic, and exteriors. They’ll know what to look for that might not be immediately apparent to you, especially regarding health and safety concerns. This can indicate where improvements need to be made (as well as the aspects that are in great condition).
Acquire Honest Input
When developing relationships with a good property inspector, they’ll give you an honest assessment about your investment properties, which you may not always receive when you consult only with a real estate agent. They’ll let you know what’s truly needed to bring the property up to code or even turn it into a worthwhile investment. If a property is currently in excellent condition, they’ll also let you know that! Adding a quality inspector can make a huge difference in your business.
Curb Future Costs
While it may be tempting to skip the inspection if you’re trying to save money on an income property, this decision can be an expensive one in the long run. Any money you might save by initially waiving that inspection might translate to tens of thousands of dollars in repairs or other losses. So whether you’re going to start real estate investing for the first time or you’re a seasoned pro, it’s always worth it to spring for a property inspection.
Why You Should Add a Property Inspector to Your Real Estate Investing Team
If you’ve been frantically asking the internet, “how can I start investing in real estate,” you’re bound to come up with several different answers.
Finding affordable properties with a platform like Privy is essential, as is educating yourself on the different kinds of properties you can invest in. However, one of the top real estate investing tips we recommend is to build your team sooner rather than later.
When getting started as a property investor, you’ll quickly learn that you can’t possibly do it all on your own. DIY can save time and money for some investors, but you’ll have to discern when it’s better to bring in an expert than attempt tasks or projects on your own.
That’s true with property inspections. You may learn how to recognize obvious signs of water damage or faulty wiring, but there are certain warning signs that only a professional can find. In addition, working with a reputable property inspector on an ongoing basis can allow you to build trust with someone to turn to whenever you’re looking to add a new investment property to your portfolio.
Most real estate industry professionals recommend surrounding yourself with the best of the best! You don’t have to rely on your real estate agent to connect you with a reliable inspector. Instead, you can bring your own!
Build a connection with your inspector, check out their reviews, and consult with others in your industry to obtain recommendations. This can help you conduct inspections quickly and ensure you have the information you need to make better investments.
Invest Wisely With Property Inspections and Privy!
If you’re already using the Privy platform to find great residential real estate deals, you’ll know how important it is to make savvy decisions when investing—but you’ll need to take it one step further. Once you find what seems to be a great investment, you should obtain an inspection to gain valuable insight.
Protecting your investments requires finding out as much about them as you can before you ever commit to purchasing a piece of real estate. While you might not know enough to recognize the potential signs of trouble, a professional inspector can clue you into what you’re missing and help you make an informed decision.
When investing in real estate, real estate investors can't skimp on necessary jobs or resources that can help you experience more long-term success and wealth! In addition to a trustworthy inspector and other critical members of your real estate investment team, Privy is a valuable resource to find properties that fit your portfolio and goals. Reach out soon to learn how the Privy platform finds excellent real estate investments and delivers them to your inbox!
Learn more about the team you need to succeed! Download a free copy of “Assemble Your Real Estate Investing Team: A Worksheet.”