When I was a rookie investor, I made some seriously costly mistakes—and one of the biggest was failing to get an inspection on an apartment in a small building before I signed the purchase contract. Everyone around me said it wasn’t necessary. Indeed, in New York City, it is generally not customary to get a home inspection when buying an apartment or condo. The rationale is that many of the things that could go wrong are the responsibility of the building, rather than the individual unit owners. Well, it turned out that the low maintenance fees weren’t enough to cover the cost of replacing a suddenly leaking roof and guess who had to foot the bill?
Lesson learned: There are circumstances in which you should get a property inspection—even in a multi-unit building. It’s a small insurance payment on a large investment. It makes sense to find out precisely what you’re buying before you seal the deal.
Why is it Critical to Get an Inspection?
You will especially want to get an inspection when considering units in certain types of buildings that are more likely to have serious underlying problems. If the apartment or condo is in a small building, like mine was, you will definitely want to get an inspection to avoid being hit up for costly repairs that surpass what the building owners will cover. In addition, if you are looking at a unit that is more prone to problems than others, like an apartment on the top floor which could experience roof leaks, an inspector may be able to help you accurately evaluate the risk. Also, it is smart to get an inspection on any units that are in a new building built by an unknown developer.
Generally speaking, home inspectors will perform a visual evaluation of the property, inspecting all areas that can be accessed. They will ensure that the plumbing fixtures and kitchen appliances have been installed properly. For older buildings, the inspector can offer helpful info, such as whether the double-hung windows will safely remain open on their own or whether the unit’s electrical wiring can support the demands of today’s technology. Sometimes, they will find that the radiators in the unit have been tampered with by previous tenants who wanted more jurisdiction over the centrally-controlled steam heat output. These are issues that may be hard to identify if you lack experience as an investor or as a builder.
But, property inspectors can also provide more insight into an apartment or condo’s condition—insight that far surpasses what you can spot with the naked eye. This is essential in a multi-family building since it’s possible that neither you nor the inspector will have access to shared parts of the building, such as the boiler room or roof. The best property inspectors can overcome that challenge by using leading-edge drone technology. They can attach thermal imaging cameras to identify HVAC problems in the ducts, ceiling leaks, circuit breaker issues, and even missing insulation. Even with access to shared areas, pinpointing these issues would be more costly without drone technology. That’s why I recommend getting an inspection from a professional who uses this technology.
Ensuring a Sound Investment
After getting unexpectedly billed for a new roof on my New York City apartment, I consider it foolhardy not to get an inspection on every property I consider. The building’s new roof came with a price tag of $100,000 and it was a five-unit building, so I had to shell out a whopping $20,000! I wish I could say this cost was recovered after I rehabbed then sold the unit.
These days, I make smarter decisions by accessing all the resources available as a HomeVestors® franchisee. In addition to getting a home inspection for each investment property that I acquire, I also use the proprietary ValueChek™ software to help me determine the costs for each repair that is needed. This gives me the insight and information I need to make an offer with more confidence. If you have had an experience like me where an investment just didn’t turn out like you expected, perhaps it’s time to begin accessing some of the best investment resources available. Give HomeVestors a call today to find out how you can improve your business strategy.
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Prior to joining HomeVestors, I spent 20+ years as a senior corporate executive. The money was good but I just no longer enjoyed what I was doing. I had been looking at HomeVestors for a couple of years but they were not offering franchises in N.J at that time. I had zero experience in real estate investing and was impressed with the training and support HomeVestors offered. HomeVestors opened up the NJ market in February 2007 and I started in July. Best decision I ever made. We got off to a fast start and have purchased a couple hundred properties since. We could not have done this without the training, systems, marketing and support HomeVestors provides. We haven’t looked back since. We became Development Agents in 2010 and really enjoy working with new franchisees when they come on-board and helping them build a successful business.