Getting a home inspection is critical before buying a new property -- not just to properly assess the home you’re investing in, but also to gauge the labor and costs it will take to get the home up to speed. This is especially important if you plan to rent out the property or flip it to another buyer.
Knowing how to read your home inspection report is vital as well. While you don’t need to understand every little nuance, it's important that you can spot the deal breakers -- defects that will cost loads of time, money, and effort to fix (or, in some cases, may even be unfixable).
Are you preparing to invest in a new property? Want to make sure you’re not getting a lemon (or losing out on ROI)? Then look out for these five deal breakers.
Fixing deep foundation issues is no cheap feat -- and it’s time-consuming, too. If your inspection reveals potential foundation issues -- things like cracks in the brick or doors that are hard to open or close -- think long and hard about investing in the property.
Have a contractor estimate the possible repair costs and timeline, and make sure to factor in the delay it might cause in flipping or renting out your property. Do you have the cash to support your business while the repairs are made? Can you afford to wait on those returns another few months? Generally speaking, foundation repairs cost anywhere from a few thousand dollars to upwards of $20,000 and can often take months to complete.
Wiring issues (especially knob-and-tube)
If you’re considering an older home, your inspector might find dated knob-and-tube wiring on the property. Though this was once the norm when building homes, it’s now considered a major fire hazard -- especially once modern appliances and electronics are plugged in.
If the home has knob-and-tube wiring, it will need to be fully removed and replaced with a grounded system. This can cost as much as $30,000 in some cases.
Other wiring and electrical issues may crop up on your inspection as well. If they do, talk to a local electrician to get a feel for repair costs.
Mold or mildew
Mold and mildew can be a major health hazard. And remediation of these issues? It’s no joke. Not only do the infested materials need to be removed and replaced, but the home will need a top-to-bottom cleaning as well. If the previous water issue or leak hasn’t been repaired yet, that will need to be done, too, adding yet another cost.
The exact cost of fixing a mold issue will vary, but you can typically expect to pay at least a few thousand dollars. Severe problems will be even more expensive to address.
A really old roof
The roof is a pretty important part of the home -- not to mention your investment. And while they often have very long lifespans (think several decades or more), at some point, they eventually need replacing. And doing that? Well, that can cost anywhere from $3,500 to $44,000, depending on the size and materials.
If the inspection reveals potential roof issues, consider getting a dedicated roof inspector out to assess the property. This will give you a better idea of what work is needed and the potential cost.
Bad previous remodels or upgrades
Most people want to save money, so when they upgrade or renovate their homes, they may decide to cut corners -- choosing shoddy materials or DIYing it, for example. This can cause bigger problems later on, especially if those upgrades were on major parts of the home, like the plumbing, electrical system, or overall layout/structure.
You’ll want to request disclosures for any upgrades or remodels the previous homeowner did, and if the inspection reveals any issues stemming from DIY work, do some digging. Check with the city to see if proper permits were filed (this indicates it was probably done by a pro). If there aren’t any permits, consider it a possible deal breaker.
The bottom line
Being able to understand your home inspection results -- as well as spot the more expensive and time-consuming defects that are found during it -- is imperative to making a smart property investment.
If you can, choose an inspector who includes photos in your inspection report, as this will make defects easier to understand. You should also have a trusted contractor look over the report to help you gauge repair costs. This can help you better negotiate pricing based on the inspection, as well as ensure a good ROI.