Purchasing a re-sale landed property is never an easy decision. In fact, this decision will most likely be a more difficult one compared to when you’re purchasing a newly developed condominium unit – which in most cases, would be presented to you in tip-top condition.
The physical condition of landed properties differs from property to property. Some of them may have experienced great lengths of mistreatment from owners, tenants or landlords, resulting in conditions that are not too ideal. If you’re fortunate enough, you may encounter the more decent ones before making your decision.
There is no doubt that there are still owners out there who do not take extra care of their homes. Tenants are as indifferent as owners themselves; after all, they do not own the property. Landlords may forsake the property too as it is merely a source of income for them.
When you’re purchasing a landed property in the hope of capital gain, you’d be wishing for condition that is decent. This would mean not having to incur costs to renovate, re-vamp or maintain the property. The ability to identify both the large and small details of the property will give you an edge in recognizing the issues you need to resolve with your potential property. It will decide whether the investment will be a rewarding one or not.
There is a deceiving element to nice-looking properties. Although this may sound odd, it’s good to keep a look out for those that are not too aesthetically pleasing. Specifically, you should spot those that are in dire need of a major facelift. Cosmetic-related issues can be easily dealt with and require you to spend the least to resolve them.
Deciding to purchase a property that is physically in good condition may seem like the popular choice, however, there are many investors who in truth, would rather pick properties that are of poorer condition. These properties are better known as “fixer-uppers”.
Feeling confused as to why they would rather pick the bad over the good? Well, here are some their reasons:
- The space for price negotiation with the seller
- The joy derived from doing up their landed property
- “Property flippers” whose focus is on increasing property value and making profit
If your sole purpose of purchasing the landed property is for rental income and you wouldn’t mind resolving some extra issues, it can be advantageous (in terms of the potential profit you can make on the investment) when you purchase a property that needs some work rather than one that is already presentable. There are a few reasons for this:
- You are in a better position when negotiating for a more reasonable price with the seller
- The costs required to repair or maintain the property are minimised
- The amount of time required to beautify the property is reduced
Therefore, when we consider all these factors, we can conclude that the best purchases you can make are the ones that appear the worst; those in need of an aesthetic makeover. This leads to the next question: how would you know if an aesthetic facelift is all a property needs?
The first rule when purchasing a landed property – completely avoid one that has suspect or weak foundation. Resolving a foundation issue can be very time consuming, it may burn a hole in your wallet as well.
For instance, a property that is built on a strong foundation of concrete, the only possible work required is leveling. However, for properties with a lack of strong foundation, its weaknesses are usually visible. They can come in many forms, cracks are the more common ones. There are others too, such as unaligned brick walls or window frames and doors.
Landed property which are built with an added basement are more likely to incur moisture issues. Do not be too concerned over small cracks, nevertheless, do watch out if leaks do occur in the cracks. This can result in the growth of unwanted mould.
The costs associated with resolving moisture issues are not low. It can potentially strain your financials and it is an unworthy cause. Just like the classic quote, “There are plenty of fish in the sea”, there is a myriad of landed properties out in the market which do not bear such cumbersome issues – focus on those.
Fixing the roof is never cheap. A new roof has a lifespan of up to 20 years. The amount spent on fixing the roof depends on its age and condition. It is a common sight with roofs losing its colour and can be easily resolved with a quick clean using a chemical agent or bleach.
If you face an issue with the roof, try to see if there’s a possibility in simply placing a new layer over the current one. This reduces costs substantially rather than having to replace it with a brand new one.
If you face constant leaks, it is most likely to be a problem with the roof. Try to examine and spot for leaks or stains. If you own an attic, check directly under the roof to see if there are any problems. If it fulfils its sole purpose, it shouldn’t be much of an issue.
Do your utmost best in examining the condition of the house. Check if all the toilets, taps, water heater and pipes are working normally etc. For homes that are older in age, examine the roots on plants and trees to see if they might result in future piping issues.
Most importantly, never leave out the sewage system. The sewage system is underground and it can turn out to be one of the biggest problems of your house. It is never advisable to purchase a property with an outstanding sewage problem, well, unless the owner is willing to resolve it before the purchase takes place.
Fixtures & Appliances
Home fixtures and appliances will experience the usual wear and tear after a period of time. These are usually the doors, windows, walls, air-conditioning, kitchen appliances etc.
Do your research and pick what’s the most economical solution to your problem. For instance, re-painting your wall would be a more practical solution than replacing your entire wall.
It is always important to have a quick walk through the entire house to test if its switches and electrical units are working normally. They face wear and tear problems too and would need to be replaced if necessary.
Fixing electrical wiring issues would not come cheap as it would require professional technicians to be called in to build these wires into the internal structure of your house. This just means that more has to be spent on such issues.
It takes time to develop an eye for detail in properties. If you feel that you lack the knowledge of how to identify promising properties, never be shy to seek professional help. Last but not least, always ensure that your contract includes a clause which states that an agreement will be reached only after your property professional reports back to you with a satisfactory review.