When we first started investing, we were really careful. We got LIM reports and builders inspections because it was better safe than sorry. As time went on, we thought that we knew a bit were encouraged by real estate agents not to tie the contracts up with silly clauses such as LIM report’s because vendors didn’t like them and it took 10 days for the report to come through.
All of our properties never seemed to have any issues with them but we have since found out that one in particular, does have a few issues, some of which could be quite costly to fix.
A nice DIY handy person who was also the previous owner added a meter or so to the dinning room to one of our rentals before we brought it. To look at it no one would be able to tell that it had been done, the job that was done was professional and it looked great. WE had no idea that there were any issues until we put the property on the market and the prospective purchaser brought it to our attention. They had gone to the council office and looked at the site plan where the addition was picked up.
From here several things happened. The prospective purchaser offered us 20 thousand dollars less than asking claiming that their builder said it would cost that much to rectify. That offer was kindly declined.
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As the council no longer offer safe and sanitary reports on dwellings and fixtures, we had to get another company in to have a look at the addition. In their opinion, yes the structure would have to get a council permit and to do that the wall linings would have to be removed and the wooden structure inspected to see if it was made with treated timber. We consulted our builder and the cost to rectify the problem 5-8 thousand dollars.
Now in my opinion the addition wasn’t a problem to us. It didn’t leak and the exterior cladding was built out of the same materials as the rest of the house. There was no movement in the addition by way of cracks in the flooring, around the windows or in the ceiling so essentially there was no problem as far was we were concerned.
We are lucky we researched the issue a bit further and didn’t loose 20 thousand dollars, we are lucky that the person whom purchased the property doesn’t see it as a problem either instead an opportunity to purchase a property well priced in today’s market, with a bit of extra space to entertain their guests in.
So no matter what is happening in the market, no matter what you are buying, always get a LIM report. It could provide you with negotiating power and it could also give you a good night sleep.
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