Investor · Queens, NY · Member since 2020 · 5 posts · 0 votes
Hello BP community!
I'm in a process of buying my first rental property. I got the inspection report and I found following bigger issues/ concerns
1. The furnace is getting old - but the buyer is buying a home warrently for 1 year and it's covered under warrenty
2. Water heater is getting old - Covered under 1 year warrenty
3. Roof seems to be in a second half od life
4. Rotten wood, missing cranks on window
5. water damage in bath sink
6. Water intrusion in electic pannel
I needed help to understand ideally which of the above things I should consider asking for rapir/ credits. Some of these things might cause bigger issues in the future, and I'm aware that without more details it's very diffult to answer. But I would really appriciate any help I can get. This will help me make a better decision and learn few things :)
Hi, @Nikhil Raverkar! Congratulations on going through the process on your first rental. Do you have a good broker working for you on this? I hope that they are doing their job and helping you out if you are.
To answer your questions, ALWAYS ask for safety related items, no matter what. This would include the water intrusion in the electrical panel. How old is the water heater? Furnace? How is the rotten wood happening?
I think it all depends on what value you're already getting out of the house. Are you getting a good deal on it? These are considerations when possibly buying the home as-is. If you're paying a somewhat premium price on it, I think it's fair to ask for solutions, price adjustment, etc on items 1-4,6. The second half of life on the roof might be still 10-15 years? But if you're really concerned, ask the buyer to provide a roof certification of at least 5 years, otherwise have it replaced. The furnace can be old, but still be a good furnace, so that doesn't always concern me. I have furnaces that are old that are 50 years old and working but it depends on the area, renters, etc and what they might expect in terms of efficiency. Water heater, if it's around 10 years old, get it replaced, they will go bad and aren't designed to last more than 10 years. Water damage in bath sink sounds like it's old and not really an issue with the home, but if it's something active/leaking, then perhaps get it fixed.
Ultimately it might all come down to how good your broker is, the price/value of the property, and the negotiating skills in play.
Thanks for the detailed answer. Really appricate the information yuou gave.
So both the water heater (around 13 years old model) and Furnace (41 yer old) model are getting near replacement life based on the timeline you shared. I paid 4% above the asking price to get the deal. My broker is suggestion to negotiate on 4-6, but is not very concered about 1-2 purely because it is covered under 1 year warranty. And does not seems concerned about the roof.
My primary concern was, the warranty is just 1 year so I might have to get them replaced not too long after the warranty runs out. And the captial expenditures I would have saved by that time would not be sufficient enough to replace them.
Thanks again for your Help!!.. really appriciate it :)
It is common practice to ask for repairs or credit for items that will need fixing. Example: 13 year old water heater has one foot in the grave. Normal life is 6-8 years. Not sure an insurance company would actually cover a 13 yr old unit.
Older furnace--have it checked by a licensed plumber and check the chimney--must be lined.
One rule in negotiation to remember--if you don't ask, you don't get.