Things You Need To Ask Before Buying An Investment Property....
Over the last 18 months we had put in 12 offers on properties and while we had been really close a couple of times , we still hadn’t managed to secure a property. So I thought it was time for action, I would look for open tenders or properties that had a fixed price. Yea right! we all know those come along each week in Wellington. Open tenders it was! Matt, who looks at TradeMe every day, saw a property he thought I would like. I rushed to the phone and arranged a viewing for the next day. It was 2 large bedrooms with a study or 3rd (very small) bedroom, new kitchen and bathroom and the basement had potential. It had been turned into 2 bedrooms with internal access in the 60s but did show signs of water damage. This had been fixed according to the owner and she would supply invoices totaling $25K supporting this. Alarm bells should be ringing at this stage but it didn’t smell or feel damp. The LIM had been ordered so I made an offer with that being the only condition. I arranged to meet with my builder the day after we went unconditional and this is where the drama started.
- Over the weekend there was a rain storm, the largest in 50 years.The basement had water seeping in
- The invoices the owner supplied were for sewage work not storm water or drainage
- The builder advised me to walk away but it was too late, we had gone unconditional
You're probably thinking, "Why on earth didn’t she get the builder in before going unconditional?" You're right I should have but I didn't. This wasn't the end of all the drama! I asked my very patient husband to arrange the insurance and he rang me with a list of questions. He had a 14 page questionnaire to complete and we needed an electrical certificate. We arranged access for our electrician and he advised us that while the property had been partially rewired we needed to get the rest of the house rewired before he could issue a certificate because the rest of the remaining wiring was original 1920’s and was no longer to code. We have now had this work completed but he had to cut holes in walls and ceilings and the property had to be prepped and painted once the rewire was completed to get the house back to a livable standard. So here is the moral of this story.
- Get a builders report prior to going unconditional
- Ask when the property was last rewired and get the electrical certificate
- Talk to your insurance broker if the property is 10 years old or older
- See all the invoices before you go unconditional
- Email your agent all your queries and ask that he/she reply in writing
- Don’t just ask if the property has insulation, ask when it was insulated and if under the floor and walls are insulated
- Ask if all the white ware and heaters supplied are in working order, get this in writing
- Get the property meth tested, the cost is minimal for peace of mind
There is an upside to this, with rewiring the property it is now safe for the tenants, the property looks fantastic with the new paint job and lastly we have secured good tenants for a very good rent for the next 6months. We have locked the basement off from the rest of the house and will make it water tight and have 6 months to make sure that it works.
Happy hunting and if you need a rental appraisal please give me a ring - Sue