Many investors or property buyers find the real estate due diligence procedure to be difficult. Knowing where to begin, what information to analyse, and how to obtain the necessary information to help you decide whether or not the property you are looking at is a wise investment can be frightening and stressful (especially if you have never done it before). We are here to make that procedure far less scary by outlining important due diligence must-dos and providing 10 wise buyer-friendly suggestions.

1. Nearby housing density

If you learn too late that you will be adversely affected by future medium or higher density development, there may not be anything more painful for you as a property buyer. Of course, even if there aren’t any nearby permitted developments, it’s still a good idea to look into the land’s potential for future development. It might not be allowed right away, but it is best to learn before you buy so you can see how a neighborhood might appear in the future if the council planning scheme permits building to a higher density in the neighborhood.

2. Examine the area and the property in detail

Simply put, you can’t rely on sales agent-provided photos on a real estate listing to tell the whole tale. A comprehensive method for doing property due diligence must include an on-site inspection. Listing photographs do not show the streetscape, the caliber of the properties next door, or any potential noise pollution caused by surrounding highways, businesses, or even the neighbors themselves. In addition, viewing a property with your eyes as opposed to through a wide-angle lens frequently yields a more accurate idea of the room proportions, layout, and build quality. This might have happened to you while you were looking for a home. You have probably experienced moments when you realized that a property looks a lot better in the listing photos than in real life!

3. Request approval certificate & insurance cover for recent renovations and extensions

Many homes that are sold may have had renovations, extensions, or even the addition of new features like a deck or a carport in the past. Real estate buyers should be aware of whether these types of upgrades have certification. A final certificate must often be produced for any form of addition or modification requiring a building approval in order to confirm that the work was finished in line with the building code. Additionally, approved building plans must to be accessible. You have the right to request this information as the buyer, and the seller should have no trouble providing it if the work has been done correctly.

4. Learn about the demographics of your prospective neighbors 

Before purchasing a property, there are a few easy ways to find out who your neighbors are likely to be. You can quickly establish if a suburb is mostly made up of owner occupiers or renters thanks to the easy availability of suburb profile data from Australian Bureau of Statistics. Generally speaking, owner occupiers own about 70% of all dwellings, compared to investors who own just 30% of all properties. You might wish to confirm that you are residing among other homeowners if you are a property buyer. If you’re an investor, is it crucial for you to participate in a market that hasn’t already seen a lot of activity from other investors?

5. Check flood, fire, noise, and other risks 

Numerous potential risk factors can have a detrimental effect on a property’s value or maintenance costs. If you don’t look for these things, you might not find out until it’s too late. Particularly in regions built near river or creek systems, flooding is fairly evident. We are aware that after heavy rains, rivers might overflow at their banks and creeks can swell and flood neighborhoods. Other flood impacts, though, might be less visible. Overland flow or the influence of storm surge should also be examined. Other risk categories include bushfire risk, noise overlays, and environmental consequences. These hazards will all have an impact on how you evaluate a property at the time of purchase.

6. Review of Strata / Body Corporate records and meeting minutes

Property buyers should always be aware of the contribution and sinking fund charges related to this kind of program when considering buying a property that is owned by an owner’s corporation or a body corporate. I strongly suggest requesting a copy of the most recent Owner’s Corporation or Body Corporate meeting minutes as part of a thorough property due diligence process.

You might be shocked to hear that there are some high-cost maintenance issues that have been reported but have not yet been resolved. However, once you purchase the property, you will be responsible for covering the expenses of any necessary repair or maintenance work. You may avoid a lot of future problems by doing just one action.

7. Underground services

This is a point that is frequently ignored. The only way to determine whether underground services, such as water, sewer, and storm water pipes, are present beneath a property is to conduct an underground services search on a website like Dial before you Dig.

Even if these kinds of assets were found, some buyers might not care how they plan to use the house. However, the availability of these amenities may be a deal-breaker for other buyers, particularly those seeking to construct a pool, expand through remodeling, or even redevelop.

8. Historical Capital Growth

The family home may be the only property many people ever purchase, but knowing how that asset might grow a future nest fund is important for ensuring a more comfortable retirement. As experts in property investments, we can never predict with confidence how a property’s value will rise in the future, but we can get insight into local historical trends to obtain a better sense of where a property’s worth may be headed.

9. School Catchment Zones

People frequently choose where to buy based on the local school that they want to send their kids to. If you live just outside the school’s catchment area, you might not be able to enroll your children in that school because some of them have enrollment management systems. It is crucial to realise that school catchment areas do not coincide with suburban boundary lines, therefore you must perform a second check as part of your due diligence process to make sure the property you want to purchase is located in the desired catchment area.

10. Search the Title History 

To make sure you obtain the title free and clear of any ownership problems, you must conduct a title search prior to making the final purchase of a property. There may be a lien against the property that needs to be satisfied before it can be sold if the previous owner had work done on the house but did not pay the contractor the full amount owed. The buyer might have to settle the debt before the title can be released free and clear in your name if they are unaware of this lien.

To obtain more info regarding finding the best investment property or a suitable development site for your specific needs and goals, arrange a free strategy session with our buyer’s advocate.

A strategy session includes the following:

• Assessment of your current situation
• Discover property investment strategy options
• Recommendations related to the right property investment strategy for your specific situation
• Confirm next steps 

Call 0411 70 3682 or email to arrange a discussion.