Have you ever heard the saying ‘you make your money when you buy’? This is very true, especially if you are buying a property to renovate or improve to increase the equity. But to make your money when you buy, you have to buy at a good price and know exactly what you are buying. You also need to know that the property is going to be suitable for the project you want to undertake.
So to buy well, you need to undertake a high level of due diligence. There are some due diligence checks that are often overlooked and can often stop your plans for the project literally before you’ve even started. These are some of them:
Check the property has no easements. If you plan to extend on a property or add a granny flat and the property has a easement where you want to build. Then you can veto your plans as you generally can’t build across an easement. Easements simply mean there is stormwater or sewerage drain running through the property. Check the council records to see if the property you are buying has any easements.
2. Heritage listed / Character overlay
There is nothing worse than planning a elaborate renovation on the perfect property only to find that there is a Character Overlay in place or the property is Heritage Listed. This will restrict what you can and cannot do with the property and often they are very restrictive. Certain features, usually related to the structure, the look and the materials used on the property are protected and/or restricted. Council records will indicate if the property is subjected to Character overlay restrictions or is Heritage Listed.
Similar to Character overlays, Covenants can put a halt on home improvements if the house or land is under a covenant restriction and the improvements do not abide by the covenants. Just like character overlays, covenants can impact on the material you use, can affect how high you build, and even stop you adding an extension to the property. The difference however is that covenants are set by the developer and not the council. Check with the Real Estate agent before you buy to see if the property is under covenant conditions. (Read more about Covenants here)
4. Wrong Zoning
Zoning checks should definitely be high up on your due diligence checklist. What the property is zoned can impact you greatly if you plan to subdivide or develop. Make sure you check the zoning directly with the council for the property you intend to purchase as Real Estate agents can and do get it wrong.
This is a biggie, and can also have a huge impact should you wish to subdivide or develop a property. Flooding will significantly impact how much useable land you have to work with and what you can do with that land. It will also affect your insurance on the property with some insurers not willing to insure properties that are subjected to flooding. Make sure you check the flood maps for the property.
Don’t have the brakes pulled on your projects before you even start by not checking these five important due diligence checks. One or all of these oversights can not only stop you from completing the project you had planned on the property, but they can also affect you when it comes time to resell. Don’t be left caught with a unusable, unsellable property.
Until next time…
Chicks and Mortar – Building smart property women