Termite Bond Alabama Investment Property- yes/no?

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Termite Bond Alabama Investment Property- yes/no?

Bastian Kneuse
Rental Property Investor · San Francisco, CA · Member since 2017 · 132 posts · 56 votes

I am in the process of acquiring a MFH in Alabama. The home was built early 1900s. As it relates to termite inspection/prevention, would it make sense to purchase a termite bond. The cost for it seems pretty high and I am wondering if it is worth it. The one-time set up fee is about $1000, with annual premiums of $170. The premiums do not cover any termite damage.

Alternatively, couldn't I just conduct an annual termite inspection and then treat it if necessary? Wouldn't take come out cheaper at the end with the same results as opposed to a termite bond?

Appreciate any thoughts or advice.

Thanks!

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Denise Evans
JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
7y

@Bastian Kneuse, the bait system also goes by a trade name of Sentricon.  It's what you need in Alabama because termites are just pervasive, and the poison people formerly use to poison the earth for 1,000 years is no longer allowed.  Cups are sunk into the ground, with bait in them. The bait is checked quarterly and refilled if necessary. They circle the house at 10 feet to 20 feet from each other, plus any other structures you want protected. They attract termites, who eat the bait and also take it back to the nest to feed to the queen and young termites. The bait contains a growth inhibitor that prevents them from molting, which results in death. Death is far from the bait site, so they don't know to avoid that site. The system protects your house from termites ever reaching it.

The pest control company inspects the house annually and poisons any areas where termites have penetrated the bait shield.  I've never once had any of my properties need that service.  Because the inspections are annual, even if there were damage, it would be very minor at that point. Therefore, no need for a replacement bond to repair damage.

When you are selling in Alabama, having a bait system in place adds value to the property.  A photo of a bait station appears below.  No, my foot does not have gangrene, it's just bad lighting:)

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  • Clint ShelleyPro Member
    Surveyor · Dothan, AL · Member since 2014 · 425 posts · 391 votes
    7y

    @Bastian Kneuse

    That is a normal fee schedule and you would be foolish not to have it. Termites are rampant here.

    Clint

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  • Denise Evans
    JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
    7y

    Get the bait system which includes monitoring. Worth every penny on resale to be be able to assign that bond. Termites a huge problem. 

    0Reply
  • Bastian Kneuse
    OP
    Rental Property Investor · San Francisco, CA · Member since 2017 · 132 posts · 56 votes
    7y

    @Clint Shelley@Denise Evans

    But wouldn't annual/bi-annual termite inspections result in the same outcome?

    @Denise Evans

    What is the bait system? I have never heard of it? Is that different to a termite bond? 

    0Reply
  • Greg ParkerBusiness Member
    Realtor, Contractor, Property Manager · Montgomery AL and Kowaliga, AL · Member since 2017 · 663 posts · 536 votes
    7y

    @Clint Shelley you are correct.  A termite bond is borderline scam in my opinion.  Get one inspection yearly for $90.  A good treatment will last for several years.  The bait system is just (in my opinion) a profit tool for the termite companies.  Yes, termites are a problem, but Termadore is the solution.  It is contagious and highly effective.  Also, on a crawl space home, borate will last for 10 years, a termite won’t touch it.  And, don’t fall for the encapsulation method.  

    [email protected]
    MGM Property Pros LLC
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  • Clint ShelleyPro Member
    Surveyor · Dothan, AL · Member since 2014 · 425 posts · 391 votes
    7y

    @Greg Parker yeah. I feel the same about most insurance. 😁

    Clint

    0Reply
  • Denise Evans
    JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
    7y

    @Bastian Kneuse, the bait system also goes by a trade name of Sentricon.  It's what you need in Alabama because termites are just pervasive, and the poison people formerly use to poison the earth for 1,000 years is no longer allowed.  Cups are sunk into the ground, with bait in them. The bait is checked quarterly and refilled if necessary. They circle the house at 10 feet to 20 feet from each other, plus any other structures you want protected. They attract termites, who eat the bait and also take it back to the nest to feed to the queen and young termites. The bait contains a growth inhibitor that prevents them from molting, which results in death. Death is far from the bait site, so they don't know to avoid that site. The system protects your house from termites ever reaching it.

    The pest control company inspects the house annually and poisons any areas where termites have penetrated the bait shield.  I've never once had any of my properties need that service.  Because the inspections are annual, even if there were damage, it would be very minor at that point. Therefore, no need for a replacement bond to repair damage.

    When you are selling in Alabama, having a bait system in place adds value to the property.  A photo of a bait station appears below.  No, my foot does not have gangrene, it's just bad lighting:)

    3Reply
  • Bastian Kneuse
    OP
    Rental Property Investor · San Francisco, CA · Member since 2017 · 132 posts · 56 votes
    7y

    So, it sounds like there are way more cost effective solutions out there (i.e. Termadore,
    Borate, Sentricon) coupled with annual termite inspections, which would negate the need for a termite bond.

    @Denise Evans @Greg Parker @Clint Shelley Thank you all for your input.





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  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    7y

    I've compared termite treatments which now only lasts 8-10 years vs 50 or so years it used to with the now prohibited products. In my calculations, it's more cost effective to just do treatments on a schedule.

    The new chemicals are not as good as the previous ones but also, they're not as difficult to procure if someone is inclined to diy, you can actually purchase Termidor and some generic versions of it and do your own. The last property I had treated was about $500 and the "bond" was about $125 a year. in 8 years I could just have the property retreated and would have saved hundreds. Termites in the southeast are a huge problem and I've had problems in my personal residence after having all the pretreatments done even. Just have to keep after it.

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