Inspecting Properties

Before you go ahead and rush in to make an offer on the property, you need to inspect it - this is separate from the formal building and pest inspection you do after you have signed the contract.

This is a pre-offer inspection where you essentially are aiming to verify that the property looks like the photos and there are no obvious red flags. We are basically just trying to eliminate any red-flags (i.e. an uninhabitable shower that isn't in the advertisement) so you can either choose to not make an offer on the property or adjust your offer accordingly.

There are a variety of issues that you can look for, but most of them aren't deal breakers - I have listed some of the more important ones below which you may want to keep in mind when making your offer / conduct further due diligence on:

How to inspect properties

Option 1: Inspect the property yourself

If you by chance live close to the area that you are investing in you could inspect the property yourself. I wouldn't recommend flying across the country to conduct inspections as this is too expensive and timely.

Option 2: Ask a property manager to attend the inspection for you

This method I believe was coined by PK Gupta so please check out his content on YouTube as he discusses this a lot.

But generally, this method involves asking a property manager to attend the inspection for you and report back on any issues in exchange for you giving them the business of managing that property if you purchase it.

The right property manager, i.e. one you want to give business to anyway, will do this for free as it is in their interests as they will want your business and they will want to ensure they are managing a property which is easy / stress-free (i.e. not heaps of maintenance issues etc.). However, some may charge a small fee of around $100 per inspection.

You also won't be limited to just inspecting one property, they will be able to inspect multiple for you. However, please remember to be respectful and to not abuse this position - only send them to inspect properties you are seriously considering of purchasing, don't waste their time…

In terms of how to do this, please revisit Step 2 when I show you how to pick a great property manager and then you can also send them the below email template to get the ball rolling.

DRAFT EMAIL

Subject: Investor Seeking Property Management Services

Hi [Name],

I hope you’re well.

I am looking to engage a property manager in the following suburbs: [insert suburbs]. I understand that these are areas that you service.

I’m seeking a property manager who can assist with pre-purchase inspections and provide me with local insights on the property and the relevant suburb in general (i.e. good / bad pockets etc.). In return, I would be more than happy to appoint you as the property manager for the property once the contract goes unconditional.

Could you please send through your property management fee structure and an outline of the services you offer?

Thanks in advance, and I look forward to hearing from you.

My number is [insert] if you prefer to chat over text / WhatsApp (whatever works for you).

Kind regards,

[Your Name]

Once you have got a property manager who is on-board to help you inspect properties, it will just be a matter of letting them know the relevant property and providing them with the sales agents contact details to organise a time to inspect.

Property managers inspect properties for a living so they should know what to look for, but feel free to give a general sense of what you want to know - you could send them checklist and say this is generally what I am keen to know but that you trust their judgement to let you know anything important.

You should also request that they send through a video walk-through of the property.

For the record, this is the best of the three options.

Option 3: Ask the sales agent to send you a walkthrough video / FaceTime you

Sometimes it won't always be possible to inspect the property yourself or get a property manager to do it for you - in these circumstances you may need to rely on getting the sales agent to send you a thorough walk-through video or even FaceTime you and walk you through the property.

If you are going to get them to send you a video, you need to make sure it isn't the marketing video and that it is an actual walk-through.

When requesting this video you need to also ask if they can do things such as turn on lights, check appliances, turn on taps / showers etc. as sometimes they won't do this or try to be sneaky (or they are just lazy). If you think they have skipped an important area, e.g. you didn't get a full clear view of the condition of the bathroom / shower etc., you should request this as a follow-up.

I have found that if you are nice most agents are great at this; however, like in all professions, there are some bad agents who are either too lazy / busy to care or are trying to conceal something.

Remember that you will have a building and pest inspection to rely on which will pick up the major things, but of course that is not ideal given it costs money but in some circumstances it is the only option. You should discuss your termination rights with your conveyancer if you are going down this inspection route - just so you know all your options.

For the record, I have relied on this option a few times (and many buyers agents operate using this method, they just don’t tell you…) - it just depends on your risk appetite and the specific property.