So far in this series we’ve covered how to find the right person to help with your financing, the right Realtor to find the type of properties you want, and a lawyer to take care of the legal details. Once you have your first accepted offer you’ll want to have a trusted home inspector to ensure the property you’ve selected is one you really want to buy.
Having a quality home inspector on your team can save you a lot of money in the long run. A good home inspector will alert you of potential problems with the property itself and keep you from buying someone else’s problems. In this article we’ll cover what you need to look for in a good home inspector and what they’ll bring to your team.
Real Estate Investment Team selection criteria
If you’ve been following this series, you’ll recognize this list. Just like your mortgage broker, Realtor and lawyer, you’ll want to look for a home inspector who:
- Owns investment real estate themselves
- Cares about your goals
- Has the appropriate qualifications
- Has specific experience working with investment properties in the area
- Has reasonable fees
- Provides positive chemistry
Why Add a Home Inspector to Your Team?
So you’ve found a great positive cash flow rental property and got an offer accepted at the right price. Now what? Well, once you have your financing in place, you’ll want to make sure the property is what it appears to be. A home inspector can identify potential problems with the property, let you know about any deferred maintenance, and assess how well the property’s systems are working. A home inspection will typically cover the following areas:
- Foundation and Structure
- Insulation and Ventilation
Having a quality home inspector on your side will allow you to purchase with confidence. You may not care to know your property’s every flaw, but having this knowledge enables you to make an informed investment decision. Wouldn’t you sooner know about a crack in the foundation, a leaking roof, or that the furnace will need to be replaced within a few months?
Most inspectors charge a flat fee for their service which will vary depending on a number of factors such as experience, tools, depth of inspection and the detail of reporting. Prices generally range from $150-500, so get a few quotes and speak with a few inspectors to get a sense of the going rate in your area before making your choice.
Finding a Home Inspector
To find an inspector you can flip through your local Yellow Pages, search online, or seek referrals from other investors or members of your real estate investment team. Scope out a few choices using whichever method you prefer, and then see if they meet your requirements.
As with most types of professional, there are usually regional or national associations which serve as governing bodies for home inspectors. Look for an inspector that is licensed or affiliated with the appropriate organization in your area.
In addition to being licensed, you’ll want to make sure your home inspector is experienced and has all of the right tools. Wet meters, thermal imaging tools, and video scopes allow your inspector to do a thorough job by examining for additional problems.
Investment specific experience
Finding an inspector with investor specific experience is beneficial. Inspectors who deal with rental properties will be better informed of building codes and regulations pertaining to income properties, and can advise of more specific problems which an ordinary residential inspector may not be aware of. Selecting a professional who owns investment real estate themselves is an even better choice since they will understand your mindset and specific concerns.
Once you have narrowed your prospects down to a couple of inspectors you are comfortable with, consider whether they meet the 6 criteria above. If they pass your test go ahead and schedule your inspection, and if it is your first inspection you have a great opportunity to learn a thing or two by being present. If they refuse to allow you to attend the inspection, consider this a red flag.
Check back soon for Part 6 of Building Your Real Estate Investment Team where we’ll provide some tips on selecting an Insurance Broker.
Building Your Real Estate Investment Team Series:
Building Your Real Estate Investment Team – Part 1: Introduction
Building Your Real Estate Investment Team – Part 2: Selecting a Mortgage Broker
Building Your Real Estate Investment Team – Part 3: Selecting a Realtor
Building Your Real Estate Investment Team – Part 4: Selecting a Lawyer
Building Your Real Estate Investment Team – Part 5: Selecting a Home Inspector
Building Your Real Estate Investment Team – Part 6: Selecting an Insurance Broker
Building Your Real Estate Investment Team – Part 7: Selecting a Property Manager
Building Your Real Estate Investment Team – Part 8: Selecting an Accountant
Building Your Real Estate Investment Team – Part 9: Conclusion