Start up real estate investors frequently ask if a property inspection is needed before buying an investment property or any piece of real estate. In this article, I will try to cover the reasons why this is so important before deciding to buy a property. Knowledge of these reasons will save you money, time, effort, and sanity as a budding real estate investor.

A property inspection is defined simply as the act of acquiring the services of a licensed professional who will check the property that you are eyeing to give you the needed information regarding the status of the property including building and structural damages and any other problems that are not easily seen by anyone not trained to do inspections. This is something that you need to outsource unless you have the training and experience to do it on your own.

The general thinking of startup property flippers and wholesalers (or any investing for beginners course out there) is to buy ugly and damaged properties that they can fix and sell to make a profit. While this is true, you should also know the extent of the property’s damage. Without this information, you will soon find out that you are already putting a lot of money just to make the needed repair, way more than your allotted repair budget.

The best time to do a property inspection is before sending an offer to the property owner. This stage of real estate acquisition is frequently called due diligence. It gives you a better bargaining power with regards to the purchase price as you will be able to point out the property defects that can degrade the property’s value. This is something that should not be put aside as it directly affects the amount of money that you will make in this deal.

Let me give you some scenarios. If the house’s roof is in very bad condition, it needs to be totally replaced. Therefore, you need to allot a budget for that if you repair it after you buy it. Since you are not yet buying it, you need to ask the owner to lower the price proportional to the repairs that you need to do when the time you will replace the roofs. Since you already prepared for it during the inspection, there will be no surprises when repair time comes.

That was just a simple example. Beyond that, there are still many things that can be quickly spotted by a qualified and competent inspector. If not seen during inspection, you will just be surprised how these things can balloon your repair expenses and extending your project schedule.

Probably the most important thing that a real estate inspector can bring to the table is his ability to recognize conditions within the property’s area that are potentially hazardous to your buyers or tenants. A typical example of this is a toxic mold. If not handled properly, it can become a financial disaster that directly affects the property’s condition including foundation problems and damage in terms of its structure. A worse scenario that this can bring you is a tenant threatening to file a lawsuit for your negligence in addressing this health issue.

I cannot overly stress how important having a property inspection part of your real estate investing process. It seems so simple but it is very important when buying investment property.