Benefits of Investing

Red Flags to Look Out For in a Potential Property

When buying a home or an investment property, it can be straightforward to get caught up on everything you love about a home or unit and forget to look at some of the potential issues. In many cases, some significant problems are not always obvious, and getting an idea of what you need to look out for before you begin searching is essential.

Structural Issues

The most apparent issue you’ll run into with a property usually surrounds structural problems. These would be cracked foundations and issues with cracks in the walls, water damage, or even termites. The other major one is often the roof. Small things cost a lot of money to fix. Most of these types of items will be identified in a building and pest inspection, so it is always advisable to include them in your offer. If buying at auction, you will be responsible for taking care of this before auction day.

Potential Property

Air Con & Hot Water

Again, these are relatively apparent problems you can check out before purchasing. A ducted air con system can run into tens of thousands of dollars to replace, so it’s worth having it inspected before purchase. Similarly, hot water units only last a certain amount of time, so it might be worth factoring in the replacement costs if the system is old.

Cosmetic Coverups

With TV shows like ‘The Block’ that highlight quick renovations, most people know what you can do to spice up a property. Unfortunately, in many cases, you are just painting over the cracks. Things like painted tiles in bathrooms will not likely last for any period. And while the paint job might look nice, you’llprobablyy have to deal with it down the line. For the most part, this type of quick reno should be a red flag or, at the very least, a warning that the property will likely still need work.

Public Housing Nearby

While you might have found a property that ticks all the boxes, it is worth paying attention to the neighborhood. If there is public housing nearby, this can significantly impact the value of a property going forward, so much so that it will likely underperform substantially, all things being equal. Using tools such as to scan the neighborhood for homes owned by the various state governments for public housing is possible.

High Strata Costs – Hidden Fees

If you’re choosing to buy a unit or apartment, people can often overlook the high strata costs of owning the property. The prices are usually very high if you buy into a building with swimming pools and gyms. Similarly, most strata have what is known as sinking funds, which put money towards large projects that might arise in the future. They will sometimes have significant capital works projects on the agenda, especially in older buildings. Be sure to get a copy of the last few minutes of the strata meetings and review them. You can also order a strata report, where a professional will identify any potential costs you might be forced to pay going forward. If you’re buying a unit, the small blocks (four or fewer) don’t always have strata fees attached to them and can represent good value.

Wrong Zonings

These days, any property that can be subdivided or developed is often marketed as such. The only problem is that sales agents often make mistakes or don’t know how the various zonings work when acquiring property. If a property is being marketed as one with ‘development potential’, it’s up to you to confirm that this is true. Frequently, these blocks are more expensive, so it can be an enormous mistake to buy something that ultimately can’t be developed or subdivided, even if that wasn’t your initial intention. Speak to a surveyor prior or include that as a term in your offer.

Location of Services

One of property owners’ most common issues is not knowing when essential services like water and sewers run. If you buy a property and want to extend or build it later, you must identify that these services don’t interfere with those plans. For example, if water mains run through your backyard, you won’t be able to build over the top of them as they need to be accessible.

Don’t Despair

One of the most important takeaways when looking at all these problems you might find is that none of them means the property is not viable to purchase. If you identify a problem beforehand, you are well within your rights to return to the negotiating table. You’ll be in a powerful position if you’re prepared to take on a problem property you know you can fix. You might even be able to use these problems to secure a bargain.


I have always enjoyed writing and reading other people's blogs. I started writing a journal as a teenager and have since written numerous books and articles. My blog is a place where I can write freely about my personal interests and those of others.

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