I have just signed a contract for a currently tenanted investment property. I'm not sure what my next steps are…….
What do i need to organize next? Insurance?? Anything else?
ThanksJamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
Have you arranged finance? If not, do you have a finance clause in place?
Same applies with building/pest – some buyers make their offers subject to satisfactory building/pest reports.
Take out insurance on the property if you've gone unconditional on the purchase.
Generally speaking, the period between exchange and settlement involves getting finances sorted and the bank ready to settle.
Yes I am currently sorting my finance. The offer was placed subject to finance. In regards to insurance what insurance do I need? Are there good insurance packages that cover me for unpaid rent, property damage and maintenance?
CheersJamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
There's lots of different landlord policies out there – shop around.
Make sure you've also covered off building insurance – that's what's most important right now.
Do a search on the forum for previous threads about recommended companies.
JamieTerrywParticipant@terrywJoin Date: 2001Post Count: 16,190
Make sure you get legal advice if you haven't already.
Then insure asap – building only needed at this stage, but might as well consider a combo policy
Consider tax issues with the payment of the deposit too, if not too late
Get finance sorted
building and pest inspections etcClaireRParticipant@clairerJoin Date: 2013Post Count: 16
Have you arranged a building & pest inspection??
Appreciate every ones feedback.
In regards to a building and pest inspection I didn't get one done. Reason being i intend on developing the site in the near future. Its almost 900m2. There is a solid brick 60's home on the site with a year long tenant in place. I guess as long as it doesn't fall over anytime soon Im ok. I called the current property manager, she adivsed me that they havent had many maintenance issues of late. I hope i made the right choiceClaireRParticipant@clairerJoin Date: 2013Post Count: 16
Sam, it is a very bad mistake not to get a building and pest inspection done, development plans can always change, if your spending hundreds of thousands on a house $450-700 is a very small amount to pay to make sure the house isn't termite ridden or has serious structural damage and if you are purchasing a house with a rental agreement in place the moment it settles you're responsible for maintenance and must maintain the property until the tenants lease ends.
Also is does the current property manager work for the same agency that is selling the house? If so they have a massive invested interest in the purchase going through.
If the contract hasn't gone unconditional and isn't conditional on building & pest you can still get the inspections done, you won't be able to pull the contract if anything unexpected comes up but you could decide that you can't find suitable finance.
If you start reading a few of the well know property magazines out there you'll hear a lot of horror stories about not getting building & pest inspections done because of development plans.
Also on another note I would have asked for a copy of the current tenants ledger prior to it going unconditional to make sure they've been paying rent – I would have put this as a condition of the contract. Don't go on verbal information from real estate agents. If there are issues with them paying it doesn't mean you are going to pull the contract as you've mentioned you're purchasing for development but you could renegotiate a small amount off the price.
Also make sure you do all the other council checks & property searches to make sure you're going to be able to develop as planed.mattstaParticipant@mattstaJoin Date: 2011Post Count: 604
You will need building insurance, pest inspection, landlord insurance. Google around to find the insurance that is highly recommended.Jacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539
If you intend to develop the site, be sure to use a mortgage broker that has secured finance for others for similar sites several times over. This is not the time to have novices on the team.oc1Participant@oc1Join Date: 2012Post Count: 148
Ain't that the truth!!
OscarRichard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,018
Certainly you should be insuring the property the day you sign the purchase.
A good general insurance based Broker should be able to provide you with a suitable policy.
Secondly if you intend to develop the property in the future then ensure your lender is happy with multiple properties on a single title.
Be surprised how many are not great fans and you might be snookered.
Yours in FinanceNigel KibelParticipant@nigel-kibelJoin Date: 2005Post Count: 1,425
Great advice Jacqui
Many finance brokers only finance owner occupier homes it is important that you use people who are specialists in the area of investment or development.
There are a number of great brokers just in this post.