Here’s an interesting one. I’ve just seen a property listed on a property portal which is not in the auction. It’s been advertised for “Cash Only” purchasers. I’m always interested in these properties as sometimes you can find a gem.
My first task was to call the agent and find out the “Story” with this property because they always have one. The first thing I discovered was they has already attended several viewings. Nothing unusual in that of course but what was unusual was this wasn’t made public until yesterday!
Clearly the agent kept properties such as this in his bottom draw and offered them out to local builders/developers prior to advertising on the major property portals. Now to be honest I don’t have a problem with that as this property was not suitable for your average buyer and their job was to sell the property for their client.
The trouble is the agent now has a problem. He’s exhausted his local builder contacts and has now had to resort to public adverting. This told me two things. The property was either un-mortgageable, not worth the asking price or both. This turned out to be both and it’s a horror story.
From the limited information I could gather this was purchased as an investment property about 3 years ago and rented out. At the time it was structurally sound and in good repair. The problems began I assume when it became tenanted. Now I haven’t a clue which tenant was responsible for causing this problem and to be honest I’ve never come across this before, but this is something every property investor should be aware of – including myself …
According to the agent the property has structural problems. Apparently, someone (The tenant?) had knocked down a load bearing wall in the kitchen lounge area without first securing with a temporary support and then making good without installing a new lintel or beam. According to the agent the cracks had travelled upstairs and could be seen in one of the bedrooms above.
Make no mistake this is serious stuff. It looks like the wall which was removed was a supporting wall which also lent support to the bedroom wall. That being the case the possibility of collapse is very real which is why the mortgage lenders won’t touch it. Moreover, the poor owner of this property is unlikely to have insurance cover for an incident such as this. The normal building insurance won’t cover you for these unforeseen eventualities, so they have an even bigger problem.
Finding the right tenant is paramount and you should never rely on an agency to vet and interview on your behalf. I always arrange to meet prospective tenants personally either at their current rented accommodation or my property. Providing the financial and background checks are sound I will usually make my decision based on my instincts which have served me well.
We’ll talk again soon
Trevor
