You’re excited because you’ve just found what seems to be the perfect investment property. It’s in a great location, has an appealing design and has all-around promising potential.
But weeks after purchasing the property, hidden costs begin to surface. Maybe it’s rising damp, an unresolved zoning issue, or a title restriction that you weren’t told about.
Whatever the case, property due diligence involving things like building and pest inspections or legal and financial checks could have resolved the issue upfront. Having a buyer’s advocate in your corner to do this work is your best defence against nasty surprises.
Protecting Your Investment
Buying property is a major financial decision, so it pays to protect your capital from the start. You might be securing your first investment or adding a new one to your portfolio. Either way, due diligence will help you avoid any costly mistakes and give you the confidence to make decisions with conviction.
To protect your investment, make sure that you have reviewed the property’s title for easements, encumbrances or caveats. You also need to confirm zoning and council regulations and make sure that they align with your intended use.
It pays to understand the property’s history and any development restrictions and to request strata reports if the property is part of a complex. Ultimately, the more informed you are, the better you can protect your investment.
Identifying Potential Risks
Don’t be fooled by a freshly painted facade or a prime location. This doesn’t always tell the full story. There’s much more under the surface that you won’t know without a proper investigation, failing which you could end up inheriting somebody else’s well-hidden problem.
Through proper due diligence, you can uncover issues such as termite damage, water ingress or structural faults. You might also uncover outstanding rates, special levies or body corporate disputes that undermine your investment.
Any unapproved structures or renovations on the property that could cause compliance headaches can be brought to light, and local market conditions that could affect rental income or resale value could be outlined.
Spotting these risks early allows you to put yourself in a stronger position to negotiate or to walk away before you commit to what could be a bad deal.
Conducting Thorough Investigations
Due diligence is about arming yourself with the facts so that you can invest wisely. That means taking time to dig deeper and knowing when to bring in experts.
- Legal due diligence will take a look at contracts, title searches and planning consents.
- Financial checks will assess borrowing capacity, cash flow projections and return on investment estimates.
- Physical inspections will involve licenced professionals who can give you a detailed picture of the property’s true condition under the surface.
From building and pest inspections to legal and financial checks, WPG Advisory can guide you through the property due diligence process so that you can move forward with clarity and confidence. Contact us today to get started.