Real Estate Investments Require “Ongoing” Investment
The above phrase is something that needs to be understood for anyone looking at the prospect of buying investment real estate or even a primary residence for that matter. As we all know things fall apart, but there are several things that we can do to prepare ourselves for those times. This is a key part of what I bring to the table for my clients, and now with further first hand knowledge I will only add more value to the transaction. There are several systems that any potential buyer should be looking at, that doesn’t always mean they will be fixed before the close of escrow but at least you will know what you are getting into. Some of the obvious but often overlooked are the following:
1. HVAC, heating and cooling systems need to be thoroughly looked at to avoid large costs to replace or repair. Sometimes a simple electrical fix or preventive maintenance can extend the life of this system and be a uge cost savings
2. Roofing, the roof of a home is what keeps us dry, warm and sealed in. A small breach in flashing or old mastic material in an otherwise solid roof can compromise that system and lead to a wide range of problems. Even someting as innocent as over filled rain gutters can be a culprit. A thorough inspection needs to be done, often by a roofing specialist if your inspector calls out for one take their advice!
3. Waste and Sewer Lines, case in point! Unfortuntaley I have seen agents who do not advise their buyers to inspect this all so important system. A couple hundred bucks for a camera inspection can go along way to diagnosing any potential issues. Often times it will reveal some root intrusion or pipe offset. These problems can usually be maintained by routine hydrojetting or snaking. The worse case can be exponentially more expensive and something you want to know while still in the buying process.
4. Foundation, the name says it all. This is the supportive system that keeps a home standing and provides the base for it’s overall integrity. Water can errode away the soil, and termites can come from below and slowly eat away at your support piers. This one without question cannot be overlooked, however I have seen buyers using home inspectors that refuse to “get under the house”. Do yourself favor…hire someone who knows what they are doing and is not afraid to get dirty.
There are many more examples but these are 4 of them that tend to be overlooked or under appreciated. Do not fall victim to this…work with the RIGHT AGENT!!!!
My Story….
When I added the above pictured property to my personal portfolio last summer I was ecstatic! Even though I knew that this issue would be ahead of me. For the past 12 months I have been dilligent to keep this line clean by using a plumber to hydrojett it every few months. This way I was at least keeping the root intrusion to a minimum as I vowed to never see that line back up on my tenants. Starting around spring time this year I started shopping plumbers to get this job fixed. Keep in mind that this is not just some average plumbing job that anyone can do. This required me having a to break a large hole on the street which requires a plumber that is specially licensed and bonded with the City of LA. This further narrowed my pool of potential plumbers and I had quotes that were sky high. By accessing my network of collegaues, clients and partners I finally loacted a professional who was well qualified and was able to do the job for much less than that. For a more modest amount of money I will have this issue taken care of and will have made a very valuable upgrade to the property. Something that will appeal to many buyers should I elect to divest from this property in the future. This month I also replaced a water heater in one of these units, and replaced a stove in another. Because I had taken care to secure a home warranty policy I came out of pocket with almost nothing. Another trick I always try to put up my clients sleeve!!
