Buying my first rental - inspection & AC

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Buying my first rental - inspection & AC

Abigail Chapman
Member since 2024 · 1 post · 0 votes

Buying my first rental

Hi, I’m buying a beat up rental in Terre Haute, Indiana. I am trying to not throw a ton of cash into the fees as I’m already about 12-20k deep in. For the inspection, I can add a $195 “sewer camera inspection” to the already $600 inspection.

The $700 home warranty (1 yearr) comes with a sewerage coverage. So, I would assume that if there is any issues with the sewerage, it would reveal itself within first year and I wouldn’t need the $195 inspection.

Do I need the sewerage inspection camera if I get the home warranty?

Also do I need an electrical inspection? I am getting a general inspection, radon inspection, and termite inspection along with potential sewerage inspection.

If there were issues with electrical and sewerage, does home insurance cover that?

Also, the AC may not work. Will a home warranty cover this? Or is there a way to replace an AC without spending another 5-10k? 

Lastly, is it possible to put a “seal” on a current shingled roof, should there be any leaks? Or, would it need an entire new roof? 

Thank you in advance

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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
2y

Yes, you need the sewer inspection and you don't need the home warranty (it would never cover a sewer break). Your general inspection will cover electrical. If the AC is not working you will need an HVAC company to come out and tell if it's fixable or needs to be replaced.

To be honest, everything you are saying indicates you are going to create a money pit for yourself. If you are skimping on the buy, you will have a property that needs a lot of maintenance and it's clear you don't want to pay for it. Don't buy this property. Buy something smaller, in better shape, for the same price.

You want to kick all the tires. If the A/C is not operable you should be asking for a seller credit unless it was listed as-is.

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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    2y

    Yes, you need the sewer inspection and you don't need the home warranty (it would never cover a sewer break). Your general inspection will cover electrical. If the AC is not working you will need an HVAC company to come out and tell if it's fixable or needs to be replaced.

    To be honest, everything you are saying indicates you are going to create a money pit for yourself. If you are skimping on the buy, you will have a property that needs a lot of maintenance and it's clear you don't want to pay for it. Don't buy this property. Buy something smaller, in better shape, for the same price.

    You want to kick all the tires. If the A/C is not operable you should be asking for a seller credit unless it was listed as-is.

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    2y

    Home insurance won't cover a lot of system failures like electrical.

    Home warranties are designed to make the warranty provider money; they are slow to respond, quick to reject claims, charge you a trip fee for every visit, use the lowest-cost vendors that provide quick-fix solutions, and are generally not worth the paper they are written on. Most professional property managers will not manage a home with a warranty in place because we know that it only causes delays and more problems.

    I agree with Jonathan. You are trying to take shortcuts today to save a few dollars and that is more likely to cost you a lot more down the road.

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  • Scott P.
    Rental Property Investor · Indiana...mostly · Member since 2019 · 468 posts · 245 votes
    2y

    I mostly agree with the other 2 answers so far. Would you be willing to tell us what the 12-20k was for? That’s a big number for Terre Haute, in my opinion

    If I wanted to be on the safe side, I’d do the sewer camera inspection.

    I wouldn’t count on getting much from the warranty. I’d think any EXISTING issues would show in the first year. I wouldn’t think the warranty would cover existing electrical or sewage issues or pay to fix an existing broken AC.

    I’ve never tried a seal on a roof. I’ve seen them advertised. I’m skeptical that it would work. I’d play it safe and figure I need a new roof, especially if that’s what the inspector says.

    I regret you might be in for a lot of work for a 1st rental.

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