Inspection and Estimate list

I use a simple list to note my impression of a property as I inspect it. You can then use the photo's and notes to estimate costs for each job to be done, I always include my labour and tax in the estimates.
Make an (o)offer in consideration of the (a)price you think you can get for the finished home - (b)10% for profit - (c)the estimate for costs
So the equation for an offer would look like this
a $260,000 - b $26,000 -c$68,000 = o $164,000
This gives you a good starting point with plenty of scope for movement, its just a matter of doing the sums.

Exterior Inspections: Sample Site Plan

When you go to inspect a property, make a rough site plan. Add all the information you think will be useful when considering your offer. This sample is a guide only.

You need to note.

• Position of buildings including measurements.
• Position of windows and doors.
• Where North is.
• Position of trees and other natural features.
• Water meter,(is water connected)
• Power supply (overhead or underground)
• Gas meter.(natural gas supply)
• Storm Water connected( water Tanks?)
• Fence type and condition.
• General condition of paintwork.
• Any pros or cons of the property.
• Veiws (good and bad, eg. neighbours yards or windows etc)
• Any Improvement Ideas.

Interior Inspections:

Interior inspections

What you will need: Camera, flashlight, ladder, tape measure, paper and pencil.

When inspecting the interior of a potential property you should keep a photo record as for the exterior inspection, this will help when comparing properties and for the later recall of the condition of the rooms and the special period features such as leadlight windows, fireplaces, ceiling decorations, even appliances and plumbing fittings. Draw a quick floor plan showing position of rooms and approximate sizes, and then add ideas as you look around the house. Check for any previous renovations; always double-check any work for shoddy or illegal workmanship. If in any doubt, have it checked out by an appropriate tradesperson. You can also point out these problem areas when putting in your first offer. After a few such inspections, your knowledge and confidence will grow.

Walls - The walls can be in any condition from normal wear and tear, to holed and ruined plaster sheet, or hard plaster falling away from cracked brickwork. It is usually easier to strip out old horse hare plaster, and replace with plaster sheet/drywall, than to patch and refinish it; the job will take the same amount of time and look a lot better.
Wallpaper can be a real pain to remove, and although not an expensive job, it can be messy and time consuming.
Check for any signs of water damage on walls that might contain pipes such as bedrooms & living rooms that back onto laundries, bathroom, or kitchen. Look for swellings or hollows in the surface that could contain nests for mice, rats or wasps.
Tiled walls, that have cracked or broken tiles, or missing grout, can have water damage behind tiles like rot or moulds, this can extend to the rooms backing onto these walls.
Cracks or repairs in plaster sheet can mean movement, check this out under the floor. Re-plastering a home isn’t a huge expense and should be considered if enough walls are in poor condition. The expense will be offset by the speed and ease of painting when finishing, stripping out the old plaster and hanging the new plaster yourself is not complicated and will save money.

Ceilings – Check for water damage and stains. If the ceiling droops between joists, or nails have pulled through, there can be a build up of dust and other debris that has overloaded the plaster. From the floor, in homes with very high ceilings, it can be hard to see how much the ceiling droops.
Period ceiling decorations or ornamental cornice can be hard to repair although you can have them duplicated for a price.
If you are contemplating removing walls, the ceilings may have to be re-sheeted to hide the alteration. Reasonable looking Ceilings, will present well with flat paint, as the viewer will not be close.

Living Areas–The relationship of lounge rooms, kitchens, and dining rooms to each other is important. Orientation, to allow winter sun to penetrate the main living area, will improve livability as well as heating and cooling costs. A common improvement, for old homes with separate rooms for each function, is to remove walls and create large openings to combine these areas.
In these times of energy use awareness it may be appropriate to consider keeping these areas separate, heating, and cooling rooms, as you use them. Also smaller houses should become more popular as energy costs rise and people find it harder to meet these costs. If you can find a house with the living area on the winter sun side of the home it is an advantage. Even better would be to link an outdoor living area, by putting in glass doors.
Check power and communication outlet positions. Take window views and privacy issues into account. Imagine furniture in place and the movement of people within the space.

Bedrooms – Check for ensuite potential in main bedrooms, built in or walk in robes add value for little cost, big rooms are best. Check for power outlet position, keeping in mind, clock radios, electric blankets, televisions, and chargers for portable gear.

Kitchens – The most expensive part of renovating a kitchen, is appliances and cabinetry, if these are in good condition it is advisable to keep them and clean them up, if not allow for their replacement in your estimates (often good used kitchens can be found in the for sale section of local newspapers).
Look under sinks for water damage. Factor in a plumber if moving gas, water, or waste pipes to accommodate appliances. Check if power outlets are in appropriate places.
If a chimney exists, it may need to be removed to open up the room, Check if it is holding up the roof, if so allow for a substantial beam to carry the roof load. Hearths are hard to remove and often need a jackhammer for this. You will also have to repair the floor where the hearth is and this will affect polishing floors.


Bathrooms & Ensuites’ – The Bathroom or Ensuite can become a money pit. Have a clear idea of what you need, and want, in a bathroom before you look at potential houses. Make sure the room is big enough to accommodate all you need.
The bathroom is often the room that sells a house, clean neat and new is always a good look. Unless the bath, shower and vanity area is less than ten years old, I would consider replacing them.
I like to replace wall and floor tiles if I have any doubt about there look, or if they are waterproof.
Modern taps, exhaust fans and lighting are also on top of my list for replacement. I don’t know how many houses I have sold because a person loved the bathroom. The size of the room is the most important aspect, everything else can be redone.
Allow for plumbers costs if you are considering moving fittings, and electricians cost for power outlets and lights.


Timber Floors - Carpets, Vinyl’s, and tiles can hide many potential problems when the proposed property has a timber floor. If your idea is to replace damaged floor coverings with a similar product, then a walk over the entire floor checking for movement should be enough.
If the plan is to polish the floorboards then a much more thorough search is needed, in this case, you may need to get a carpet layer to lift and relay the floor coverings to check the floorboards are suitable for polishing. You will need the owners/agent’s permission for this. There can be staining, rot, insect damage, or previous coatings that could make polishing a very unsatisfying solution.
Tile floors that have grout missing or broken and loose tiles need close inspection, the substrate or waterproof barrier may be compromised and damage to the floorboards may be present. A thorough under floor inspection in these areas will be necessary. Under laundry sink, bath, vanity, and kitchen sink areas need close inspection for water damage.

Exterior Inspections: General

Exterior Inspection.

What you will need: Camera, tape measure, ladder, paper and pencil, and flashlight.

When inspecting a property to ascertain it's potential for renovation and/or resale you should start from the ground and work your way up to the roof. As you inspect each prospective property its a good idea to take photos as it's easy to get confused between properties when your looking at more than 1 or 2 at a time. This is also good for a diary of the places you have looked at. Also a property you have made an offer on, and been rejected, or have rejected yourself for some reason, may look better after a month or two of searching, and the seller’s attitude to offers, may have altered in the time since your offer was made.
Draw a rough site plan showing where the buildings sit on the block step out measurements to fences etc. Note any ideas on this plan as you inspect. Note any trees or other natural features of the site.
After a few inspections these checks become second nature and take little time. It will be an advantage to do a dry run or two to hone your skills. If you can do these inspections with a partner you can have a lot of fun, asking the sellers agent tricky questions and seeing how much you can save on the buying price. Remember you can make more money when you buy, than when you sell.

Footings - The footings for a house are usually Continuous/Strip (brick and brick veneer construction) or isolated pad (stumps or piers). These footings (usually concrete) connect with the foundation, normally a clay base that will minimize movement and connect the building to the ground.

If the footings are inadequate the problem will show up as cracks in brickwork and/or walls that aren't level or straight, stand at the corners of the building and look along the walls to see if they bow out or in, stand at the middle of the wall at a distance and check if the wall is level and straight, the brickwork and weather board lines will show if the footing have sunk.

Underpinning is the term used for leveling and reinforcing the strip footings if they have sunk or moved and can be potentially very expensive. With houses that have isolated footings, restumping will be necessary to rectify any problems; this could mean all stumps or just a few.

If you have any doubt as to the footings integrity, get a professional to asses the footings.

As you inspect the footings check if down pipes are connected to the storm water system or discharge directly onto the ground near the footings, these will have to be connected to a system to divert water away from the building.

Under Flooring - If the floor is raised, on stumps or piers, an under floor inspection is necessary. The ground under the building should be dry and clear of rubbish or stored goods. The under floor should be well ventilated. Here you should look for evidence of water that has been sitting under the house in the past, if low areas look like water has been lying, or are more cracked than surrounding ground their could be a problem, broken pipes, ground water, or incorrect storm water discharge, can be the source.
Check if there has been movement of stumps and piers, rotting wooden stumps, damage to bearers and joists, any previous renovation work, insect infestation, and in termite areas, any sign of termite activity or damage.

Check that there are enough under floor vents and they are not blocked or covered.

Look for any electrical or communication wiring and check its condition and installation is adequate.

Walls – The general condition of exterior walls will give an idea of the maintenance and repair work carried out over the years prior to sale. If the paint is shiny and new, you may suspect that the house has been dressed up for sale, often without the due diligence, that would be taken if the owner were keeping the house. So beware a pretty face. Check for bubbles or loose paint under the new coat.
Check walls for any cracks or holes that would allow vermin (bees, wasps, rats or mice, etc) to enter and nest.
Brick walls should be checked for cracks (at the corners of window and door openings are a common place), damage to mortar, and signs of moisture, either rising from the ground or from the ceiling line.
Timber weather board cladding should be checked for rot in the lower boards, a key or small screwdriver pressed against the bottom boards at regular intervals will alert you to soft rotted areas under the paintwork. While checking walls make sure any sub floor or wall vents are clear and not covered up.
Asbestos sheet clad walls will have to be removed and disposed of by licensed contractors, this is expensive. So get a trade’s person to quote.
New paintwork or rendering can hide potential problems. The only safe guard against being fooled is to thoroughly inspect and ask questions. If in doubt get an appropriately trained trade’s person’s opinion.

Windows and Doorways - Check all timber windows and door surrounds for rot, press a key or similar against the timber at joins to check for soft spots. Check for broken or cracked glazing. If door or window frames are out of square then there is a sub floor problem, if they are hard to open check door and frame square.

Insect screens to windows and doors, check if each opening has them and what condition there in.

Eaves and Guttering - Check eaves for gaps or damage that may allow birds or vermin to enter roof cavity, check fascia boards for rot, commonly found at corners and where rafters meet fascia.

Spouting/guttering should be checked for rust or repairs if it looks old or damaged. All down pipes should be in place and in good order and preferably connected to a storm water system to take water away from the building.

Roofing - Tiled roofs should be checked for broken and cracked tiles, rust or damage to valley flashings and broken and decaying grouting at hips and valleys and all flashings. Sheet roofing needs to be inspected for loose sheets, rust and damage to sheets and flashings. Check all flashings at chimneys and where roofs meet walls.

Site – Aspect for winter sun is becoming more important with energy use consideration in the forefront of people minds these days. Walk over the entire block, check for signs of recent tree removal, new filled areas, trees that may be a danger to neighbor’s or this sites assets. Evaluate all fences for condition and security.

Access, for building supply company vehicles or excavation machinery (concrete trucks are very heavy and can damage pavements), as well as safe and secure storage of materials, should all be considered.

Neighbors - Keep in mind neighbor’s possible objections to renovation noise, dust, chemicals and machinery use. Talk to them when you have made some decisions about the renovations required and before you commit to the property. Decide if they can be dealt with amicably, and if not, if it’s worth the hassles
.
Remember there is always another house. Take into consideration all the pros and cons and make your decisions on a purely financial basis. If you know as much as is possible, about a properties present condition, you will be able to predict, “approximately” the amount of money you will need to spend making the resale of the home as profitable as you can.

There is a lot more to know, Next Article-Interior Inspections.


Jeff

Making Money from property investments.

Choosing an Investment Property.

Are you thinking of purchasing a home to renovate, rent out or on sell when the market is right?
Have you considered improving the salability of this property by renovating or value adding?

My brother and I have been doing this for twenty years and we have a good record of profit making in this field. It hasn't all been plain sailing and in some earlier projects we had to hang on to our properties too long to make good returns. The most important experience we gained was that you make money when you buy a property not when you sell a property.

All the work you do investigating a potential investment property (before you commit) will pay off in extra dollars when it comes time to sell. The right House or Unit can be updated and prepared for a profitable sale using very few trades or paid labour. If you choose the house that is compatible with your skills, time constraints and financial means, with minimal work it is possible to create good capital gains.

As with all property purchases the location is important, proximity to schools, public transport, shopping, and future development should all be taken into account. It’s important to ask the selling agent any and all questions that come to mind.( “better to look a fool for five minutes, than be a fool for the rest of your life” always ask questions! )

The Style of house is important, check local council guide lines in the area of your potential purchase, historic precincts, overlays and planning regulations, all add to the number of hoops you have to jump through to get permissions for the simplest of improvements. If you have to get planning approval for the color of fences, then you will probably have a problem changing any other aspects of the building.

There is so much information on the Net and Television telling you how to renovate your bathroom, kitchen, living rooms etc, but before you can start these jobs you have to find a house to renovate, there are many different styles of houses to buy and improve, and your choice should be driven by your abilities.

The Ornate Victorian, Federation, Gothic revival, etc are beautiful and command high prices when faithfully renovated, with these homes, there is always the challenge of not over capitalizing, limiting the return on money and time invested. If attention to detail and chasing around second hand building yards is your thing, then this may suit you. Initial outlay and time spent on the project may be greater, so may your satisfaction and financial gain.

I have found that houses that have been basic homes, for working class people, with little or no adornments are very suitable for renovation. The advantages of being plentiful and therefore less expensive to purchase, having few restrictions on changes, being easy to modernize, no expensive or hard to get architectural features, low ceilings (cheaper to reline or reclad), easy to find second hand doors, windows etc, all keep the renovation time & cost to a minimum and shortens the turn around period.

I find that with the smaller styles of home you can also bring the standard of energy efficiency to a point where much more affordable living is enjoyed. Insulating ceilings, walls, and floors, double glazing, and alternative energy Hot Water Systems can be retro fitted at less cost as you go through your project. This is gaining credibility as a selling point as energy costs rise.

There are a lot of things to consider about potential investment properties. My experience with home renovation has been very rewarding, both in financial gain, and the satisfaction of restoring houses that have served people well, for so many years, to a point where they can become homes again for many years to come.

Jeff