Should I purchase this rental? Inspection dilemma!!!
Hi BP community! I am under contract for my first rental property. I just had an inspection done and I have a few concerns. It's a SF 3/3 1350sqf (1980) home (2 car garage). ARV is in the mid 90K and under contract for 81.5K.
The inspection came back with a few notable concerns. The furnace seems to be original, over 30 years of age and is not functioning at it's optimal state. The water heater is 15 years of age, and will need to be replaced soon. The roof is 2006 and attic inspection showed signs of leakage. All this taken into consideration, I will be looking at 15K+ almost guaranteed to put into this property in the next 5-6 years as it's safe to assume all three big ticket items will need to be replaced. No other major issues but here are some notable defects...
Plumbing vent flashing currently cracked - leaking.
Structural concerns at deck, risk of collapse - rotting ledger and house framing at connection to house - repairs needed, currently hazardous.
Gas fireplace missing damper stop - potentially hazardous.
APPLIANCES \ Waste disposal 130. Condition: Inoperative
Leak stains at the bottom of front valley (visible in attic)- likely current.
Heating in marginal condition. Furnace aged well beyond expected life- anticipate replacement.
No upgrades to the property. Considering the amount of repairs upcoming, the deal makes no sense to me now. My question is what would you put as an objection and should I pursue this property given the specifics? My intent was to lease option it but I do not want to lease option a property and dump it on someone making them responsible for all repairs with such now known upcoming replacements needed. Also, I know that age of these appliances is cannot be used as objection but does the inspection saying "heating in marginal condition. Furnace aged well beyond expected life- anticipate replacement" warrant an objection requesting a new furnace is installed (or monetarily deducted)? What are your thoughts and what would you do in this situation? Thank you!
Most Popular Reply
@Greg M. I wouldn't touch this. If you are paying 81k and it is worth 95K and it needs 15k in repairs, it is a no brainer to say no to this deal. I would cancel the contract assuming you have that right based on the inspection. i would be willing to negotiate but it would have to come down a fair amount for me to consider it.
I don't think you can mention the furnace because that was mentioned in the listing. However what does the contract say regarding the furnace? It sounds like you have other items that would justify canceling the contract based on an inspection contingency.
However you need to read the contract and inspection contingency carefully. Inspection contingencies can be very specific regarding your right to cancel vs seller repairing items.