A home inspection of a fixer upper is an absolute must before investing in this kind of investment property.
Real estate investors who get a thorough home inspection of a fixer upper benefit in two ways:
1. These real estate investors are able to plan a budget accordingly for all of the necessary home repairs found during the home inspection of a fixer upper.
2. If the home inspection of a fixer upper reveals too many expensive home repairs, a real estate investor can back out of the real estate investment. In this way, he/she avoids any real loss of money from investing in real estate.
Related: 5 Tricks to Save on Fix and Flips
Why Should an Investor Know What to Look for During a Home Inspection of a Fixer Upper?
You can see that a home inspection of a fixer upper is really crucial. Many times, the sellers of real estate investments don’t disclose all the information about necessary home improvements of fixer upper houses. Because of this, successful real estate investors know to invest money into a professional home inspection of a fixer upper.
Incomplete Professional Home Inspections
While it is recommended to get a professional home inspection, there are instances when a home inspector misses certain things about a fixer upper. As a real estate investor, you’re essentially relying on this person to tell you whether or not a fixer upper will be a good real estate investment or not. So, it is important that you have an idea of what to look for during a home inspection of a fixer upper. In this way you can be sure that the home inspector covers all corners and doesn’t miss a thing.
Saves Time and Money
Another reason knowing what to look for during a home inspection of a fixer upper is useful is that it can save a real estate investor time and money. In an initial walkthrough of a fixer upper, a real estate investor who learns the bad signs of a costly home improvement project will know to move on to another fixer upper. He/she will recognize that there is no need to waste any more time on this investment property. Real estate investors can save money on a professional home inspection of a fixer upper when they learn to see that the investment property is not worth the continued investigation.
This guide is not encouraging a real estate investor to perform a home inspection of a fixer upper alone. However, at the end of the day, it is your real estate investment. You should be more knowledgeable in the details of home improvement before you get involved.
Things to Look for During a Home Inspection of a Fixer Upper
The Foundation of a Fixer Upper
Home improvements that require repairing the foundation and the structure of a fixer upper end up being very expensive and time-consuming. These home improvements can minimize the return you see on your investment and how quickly you get to see it.
Foundation movement is a major issue, and these are clues to look for during a home inspection of a fixer upper:
- Close the doors inside a fixer upper. Large, uneven gaps between the door and the top of the frame are a sign.
- Check to see if any of the windows of a fixer upper are out of square.
- During a home inspection of a fixer upper, try to see if the floors of the investment property are not level.
- Any visible cracks in the foundation are indications that it will need attention during home improvement.
A Roof Inspection of a Fixer Upper
Many real estate investors opt for a separate professional roof inspection because a poorly constructed roof can be a serious hazard. During a home inspection of a fixer upper, be sure the roof inspection includes a review of the condition from the outside and the inside:
- Look for cracked or broken shingles. A professional roof inspection should also reveal whether or not the roof is tiled correctly or with enough tiles.
- If a fixer upper has a flatter roof, check to see if there is any sign of water gathering.
- Check the eaves and look for any signs that they are rotting or decaying.
- Investigate ceilings during a home inspection of a fixer upper. Make sure there is no sign of leakage or water stains.
- If a fixer upper has an attic, make sure you are granted access to it to inspect the roof.
A Mold Inspection of a Fixer Upper
Mold and mildew are not only hazardous to health, but they are strong indicators of water problems with the foundation, roof, or plumbing system of a fixer upper. Besides visibly seeing the mold, there are a few ways a real estate investor can discover if mold removal should be on his/her list of home improvements:
- Put your hand on multiple walls during a home inspection of a fixer upper. Try to detect if there is dampness by noticing different temperatures of the walls.
- Mildew and mold usually give off a smell in the rooms that they are found in. Pay attention to these smells during the home inspection of a fixer upper.
If there are any signs of mold or mildew in a fixer upper, make sure not to end the home inspection of a fixer upper until the cause is discovered. Revisit the foundation, plumbing, and roof inspection if your inspector indicated no problems or issues requiring home improvement. If you plan to only remove the mold as a home improvement, you’ll find it quickly returns. This will lower the value of your investment property in the long run.
Wood Rot or Termites in a Fixer Upper
Make sure the professional home inspection covers this aspect. It would be a shame to start home improvements only to have termites ruin the new wood. The first step is to ask around in the area of the investment property. Has anyone else had issues with either? During the home inspection of a fixer upper look for:
- Any significant discoloration of any wood in a fixer upper.
- Signs that wood is crumbling, like on window sills or other areas.
- Holes in the wood or wood shavings, which indicate the presence of termites in the investment property.
Wood rot is a serious issue for an investment property because it is mostly caused by a kind of fungus. Termites also cause a lot of damage to an investment property and have to be removed by professionals. Before even starting any other home improvements, you have to deal with these two issues.
The Major Systems of a Fixer Upper
It’s more difficult for a real estate investor to eye the condition of major systems of a fixer upper during a home inspection. These systems include heating and cooling, water and plumbing, and electrical systems. For these, you will definitely need a professional home inspection to tell you if they’ll require home improvements. There are questions you can ask and things you can do to make sure nothing is missed during the home inspection of a fixer upper:
- How old are these systems? Ask the owner or the realtor of the investment property.
- Have there been any recent additions to the investment property? If so, were there updates done to the major systems to accommodate them, especially heating and cooling?
- You can check the water heater for leakage or water stains on the floor.
- Flush the toilets to check that they are working properly.
- Run the water in tubs and sinks to ensure the water system is fine. Notice the pressure and how opening multiple faucets affects it. If the pressure changes significantly, there could be an issue.
- Check the electrical outlets and make sure the professional home inspector checks all of the wiring and electrical boxes.
Being oblivious during a home inspection of a fixer upper is a dangerous thing. It’s best that a real estate investor has a general idea of what to look for and what a professional home inspection should cover. While this information can’t replace a professional home inspection, it can ensure that you successfully plan for home improvement.
Don’t forget that while these tips are directed at investors interested in a fixer upper, they are a good addition to any real estate investor’s education. It’s possible for other types of investment properties to have one of these issues, and you should be aware of them. Find a great investment property on Mashvisor, and keep these tips in mind during the home inspection.