Once you’ve done the hard yards of researching, searching and securing your ideal property, don’t waste all that effort by dropping the ball when it comes to due diligence.
Many buyers gloss over purchase conditions when they’re convinced they’ve found a great property, at a great price, leaving the seller with the upper hand.
But taking the time to add in a few conditions of your own can lead to an even better investment than you hoped for.
Building and pest inspections are fairly standard conditions – and they’re crucial – but why not consider a few more that can ensure more money ends up in your pocket.
Here’s our top tips to boost your investment:
Access on approval
Request your property manager have access to the property as soon as finance is approved to speed up the process of readying it or advertising for a tenant, rather than having to wait for settlement. As the contract is generally unconditional by then, the seller isn’t at risk of the deal falling through, but it can mean the difference between securing a tenant quickly or losing money until the property is tenanted.
Planning access
If you’re planning to develop, renovate or subdivide the property, include a clause that allows you and your advisors reasonable planning access once the contract is unconditional. This ensures work can begin immediately after settlement, saving you time as well as interest costs.
Budget details
For strata properties, ask for budget details and the minutes from the last annual general meeting as they can reveal any major disputes or concerns that may affect you as owner. For example, it may give you early warning of plans to introduce a special levy for upcoming major repairs.
Seller’s Disclosure Statement
Include a clause requiring the seller to endorse the Seller’s Disclosure Statement that the agent can then pass on to you. This is a comprehensive list of warranties and disclosures the seller makes. It ensures you, as buyer, can take action against the seller if any of these disclosures turn out to be incorrect or misleading.
Potential infrastructure changes
Before snapping up the property, ensure you also check potential changes to roads, eg road widening, which could encroach on your property.
Potential zoning changes
These could be positive or negative.
Council-approved modifications
Check that any property modifications were council approved to avoid having to demolish your garage or patio.
Connection/decommissioning costs
Check if deep sewerage is connected or the property is on a septic tank, as there may be connection costs or costs involved in decommissioning the tank
Easements or encumbrances
These could have costly consequences, such as a restrictive covenant preventing you from blocking a neighbour’s view.
Just as you did you homework to find and secure your property in the first place, make sure it ticks all the due diligence boxes too.
If you want to learn more about conducting due diligence, call us on 08·9381·7450.
Or, if you’ve got any property investment questions, why not complete our Getting Started form to get the ball rolling.
Or, if you want to learn about different property investment strategies, or learn more about investing in property in Perth, why not read our free Get Ready to Invest in Property eBook.
It takes you through five simple steps to help you understand strategic property investment and how to make it work for you. Whether you’re a first-time investor or re-entering the market, it will help you navigate the sometimes complex world of property investment and associated issues you need to consider.
So if you’re ready to learn some great insights into getting started in property investment, download your free Get Ready to Invest in Property eBook here.
