Some property investors make their money by buying older houses in good neighbourhoods – then renovating and “flipping” the house. This is a good business strategy for the property investor. It can also benefit the home buyer who can often get an upgraded and modernized home in a well-established older area. Such homes are usually spacious by modern standards with bigger rooms and large, well-established gardens.
However, buyers and estate agents need to be cautious because not all renovated homes are of good quality. While some property flippers are seasoned investors who have established sound professional partnerships with architects, project managers, building contractors, project managers and specialist craftsmen, the lure of profits has also encouraged amateur property flippers to enter this market.
What should estate agents and buyers look out for when it comes to renovated properties?
Because the level of professionalism, experience, craftsmanship and attention to detail can vary greatly, buyers should be aware that there are some dodgy flippers who use cheap unqualified builders and inferior materials and design.
Don’t fall victim to a bad renovation. Make sure you ask the right questions; work with an agent and a home inspector who will help you spot red flags and advise you when it’s wise to walk away.
Here are some tips:
- Always make your offer to buy a flipped house contingent on a satisfactory home inspection. HouseCheck inspectors will check the roof covering and structure, flashing, drainage, the waterproofing, the geyser, plumbing and electrical installations.
- A good home inspection will also report on the quality of workmanship. The inspector will use a moisture meter and a trained eye to look beyond the fresh coat of paint. Are the corners square? Are the floors even? The inspector will check the windows and doors to see if they’ve been replaced and look at how they’ve been sealed. If walls have been removed then the inspector will check out the plans and identify the load bearing walls. Safety aspects regarding balustrades and decks will also be inspected.
- Buyers should also check that there are approved plans for the alterations and additions.
- Find out who the building contractors were and if possible reference check their previous work.
- Also consider the overall design of the renovated home. Open the cupboard doors and drawers in the kitchen, bathrooms and bedrooms. Sometimes what looks like a beautiful kitchen has been poorly designed so that doors and drawers hit each other – or you can’t fully open the dishwasher or oven. If appliances are not sold with the home, then it’s a good practice to measure to ensure that a standard size appliance will fit and that there are the proper hookups to function in the designated place.
- Look at the quality of the materials which have been used in the renovation. There is a lot of cheap “grey market” imported building materials and fittings for sale on the South African market and renovators and contractors may have been tempted to cut costs by using inferior non-SABS approved material.
Of course, many renovated homes offered for sale by property flippers have been beautifully updated and are sold “move-in-ready”. By being cautious and having the property checked by a competent home inspector buyers can pick-up a great renovated home in a good area and then rest assured that they have made a good investment.
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