Join Australia's most dynamic and respected property investment community

Building and Pest Inspection Reports?

Discussion in 'Property Management' started by PatSyd, 12th Oct, 2016.

Tags:
?

Do you purchase these reports before you buy your property?

  1. Building and Pest Inspection Reports

    14 vote(s)
    93.3%

  2. Building Inspection Report only

    1 vote(s)
    6.7%

  3. Pest Inspection Report only

    0 vote(s)
    0.0%
  1. PatSyd

    PatSyd Member

    Joined:
    19th Sep, 2016
    Posts:
    8
    Location:
    Sydney
    Just wonder if you purchase Building and Pest Inspection Reports before you buy your property?
     
    PatSyd, 12th Oct, 2016
    #1
  2. Big Will

    Big Will Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,101
    Location:
    Melbourne, Australia
    Depends on what your plans are with the project, if you are going to demolish the house why get it done.

    However as I look for long term B&H I always get the B&P, I had a case a couple months back where there was 50k worth of issues so that is a lifetime of B&P reports I can get done and I am still better off.
     
    Big Will, 12th Oct, 2016
    #2
    Toon and Colin Rice like this.
  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,934
    Location:
    Canberra, Brisbane and Sunshine Coast
    Yep - a few hundred outlay for such a large investment makes a whole lot of sense.

    Cheers

    Jamie
     
    Jamie Moore, 12th Oct, 2016
    #3
  4. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,620
    Location:
    Perth
    Definitely get them done!

    I had a recent purchase for a client whom expected 50k worth of improvements that turned into 150k so we didn't proceed with the purchase due to over capitlisation if we blew 150k on the property to bring it up to scratch.

    B&P can be used as a negotiation tool as well if repairs need to be made to the property post purchase.
     
    Colin Rice, 12th Oct, 2016
    #4
    JacM, Big Will and The Y-man like this.
  5. PatSyd

    PatSyd Member

    Joined:
    19th Sep, 2016
    Posts:
    8
    Location:
    Sydney
    The issue is you may not be able to win the auction in the current market so you might waste couple of thousands if you lose a few auctions?
     
    PatSyd, 12th Oct, 2016
    #5
  6. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    2,078
    Location:
    Melbourne
    ...in which case only buy knock downs at auctions, or avoid auctions altogether. ;)

    A more difficult one would be when buying a new~ish apartment. Generally the body corp will be onto any major building defects (should be in the minutes of meetings), and any major leaks etc should (hopefully) be visible (unless it's been painted over every week)

    The Y-man
     
    The Y-man, 12th Oct, 2016
    #6
  7. Big Will

    Big Will Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,101
    Location:
    Melbourne, Australia
    Then you can take on the risk.

    A cost of B&P - $500
    Issues found - $50,000

    Only a slight difference...

    Your call but if nothing is wrong or you don't win it then you might feel it was wasted but if you can handle having a surprise 50k (or 150k like Colin mentioned) then don't get it.

    Just like insurance it all seems a waste until you need it then you wish you had more :)
     
    Big Will, 12th Oct, 2016
    #7
    Toon likes this.
  8. PatSyd

    PatSyd Member

    Joined:
    19th Sep, 2016
    Posts:
    8
    Location:
    Sydney
    You made a very good point.

    Thanks.
     
    PatSyd, 12th Oct, 2016
    #8
  9. jeff3002

    jeff3002 Member

    Joined:
    1st Feb, 2016
    Posts:
    19
    Location:
    Adelaide
    We're in this same dilemma Pat. All common sense points to doing building inspections, however when 90% of places we're looking at are selling via auction, and about 50% of those going for above our price range, it'd be very easy to waste a few G's on B&P inspections.

    My question, would you still get a B&P inspection if the property had recently been renovated and re-wiring done?
     
    jeff3002, 12th Oct, 2016
    #9
  10. wombat777

    wombat777 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    2,333
    Location:
    On a Capital Growth Safari
    Yes. Be very wary of any Renovation work as in many cases it can be bad DIY. I just purchased a property that needs $4k of work done to make the plumbing compliant with regulations. Looking into issues in the B&P plus general preference to always check gas safety led me to getting a plumber in to inspect. Other minor electrical issues were picked up and had an electrician in the check the wiring as well. Negotiated a $6k reduction.
     
    Last edited: 12th Oct, 2016
    wombat777, 12th Oct, 2016
    #10
    Big Will and JacM like this.
  11. Big Will

    Big Will Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,101
    Location:
    Melbourne, Australia
    I would be more inclined on a renovation as they can hide things compared to unrenovated where you can see the movement, leaks etc.
     
    Big Will, 13th Oct, 2016
    #11
  12. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    2,078
    Location:
    Melbourne
    Yep - when we were selling an apartment with a damp issue, we had to literally keep painting the offending wall a day before each open :eek:

    The Y-man
     
    The Y-man, 13th Oct, 2016
    #12
    Big Will likes this.
  13. Big Will

    Big Will Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,101
    Location:
    Melbourne, Australia
    Nothing to see here >.>
     
    Big Will, 13th Oct, 2016
    #13