[Jump To: 3 Methods For Remote Property Inspection]
In the ever-evolving world of real estate investing, remote property inspections have emerged as a valuable tool for investors looking to expand their portfolios across state lines or even countries.
As a virtual wholesaler or investor interested in getting a property inspected, it's essential to understand the benefits and risks associated with this innovative approach.
This post will explore why real estate investors need to conduct remote property inspections, the risks involved, effective methods for handling them, and a cost comparison for inspecting properties remotely.
Unlocking New Deals With Remote Property Inspections
Real estate investors are always on the hunt for great deals, and if you’re armed with investing software like Realeflow, you may end up finding killer deals in different states or parts of the country. Traveling to inspect properties can be both time-consuming and costly (more on that in the comparison below), which makes remote property inspections an attractive alternative.
By conducting remote inspections, investors can:
- Save time and money on travel expenses
- Access a wider range of investment opportunities
- Make faster decisions based on real-time information
- Maintain a competitive edge in an ever-changing market
- Develop an investment strategy that is more adaptable to changing market conditions
- Utilize technology to their advantage, ultimately streamlining the investment process
Treading Carefully: The Risks of Remote Property Inspections
Alright - not to burst your bubble, but remote property inspections also come with risks that investors need to be aware of. The primary concerns include:
- Inaccurate or incomplete information about the property
- Difficulty in detecting structural, mechanical, or environmental issues
- Reliance on third-party opinions or data, which can be biased
- Miscommunication or misunderstanding due to limited in-person interaction
- The possibility of fraudulent or misleading information
- Limited ability to assess the surrounding neighborhood and local market conditions
Three Effective Methods For Remote Property Inspections
When it comes to handling remote property inspections, investors have three main options, each with its own set of pros and cons. In this section, we will not only discuss these methods but also provide a cost comparison for a real-life scenario where an investor from Columbus, OH, finds four potential investment properties in Omaha, Nebraska.
Method 1: Partner With Another Investor Who Can Be Your Boots On The Ground
- Leverage the expertise of a local investor who knows the market
- Potentially lower costs compared to hiring a professional inspector
- Establish a long-term, mutually beneficial relationship
- Access to local resources, such as contractors and suppliers
- Opportunity to learn from the partner's experiences and insights
- Reliance on the partner's judgment, which may be subjective
- Potential conflicts of interest if the partner is also a competitor
- Limited control over the inspection process
- Risk of misaligned investment goals or priorities
- Difficulty in verifying the partner's expertise or track record
Method 2: Hire a Property Inspector to Visit the Property
- Obtain a comprehensive, unbiased assessment of the property
- Access to a professional's expertise and knowledge
- Legally binding inspection report for added protection
- Assurance of adherence to local regulations and industry standards
- Potential negotiation leverage based on the inspector's findings
- Higher costs compared to partnering with another investor
- Need to find a trustworthy, competent inspector
- Possible delays in scheduling the inspection
- Limited interaction with the inspector during the process
- Dependence on the inspector's communication skills to convey findings effectively
Method 3: Perform The Inspection Yourself
- You can make sure the inspection gets done right
- It gives you a chance to further negotiate sale price
- It gives you the opportunity to forge a stronger relationship with the property owner
- Not scalable
- Can get expensive quickly, especially when visiting multiple properties
- You need extensive property inspection experience to do this correctly
Remote Property Inspection Methods Cost Comparison:
Scenario: You’re an investor from Columbus, OH, who found four potential investment properties in Omaha, Nebraska.
Costs of visiting these 4 properties in person:
- Round-trip flights from Columbus to Omaha: $450 (estimated)
- Accommodations for 3 nights: $300 (estimated)
- Food expenses: $150 (estimated)
- Rental car for 3 days: $150
- Gas costs: $100 (estimated)
Total cost: $1150 (estimated)
Partnering with a local investor (boots on the ground):
- Cost of partnership (varying based on negotiated terms, could include a percentage of the deal or a flat fee): $500-$1,000 (estimated)
Total cost: $500-$1,000 (estimated)
Hiring a professional home inspector:
- Inspection fees for four properties: $1,600 (estimated, $400 per property)
Total cost: $1,600 (estimated)
Virtual Vs. Remote Property Inspections
Virtual property inspections and remote property inspections both involve evaluating properties without the investor's physical presence, but they differ in their approach.
What Is A Virtual Property Inspection?
Virtual property inspections utilize video chat technology, such as Zoom or FaceTime, to enable the investor to visually assess the property in real-time, while communicating directly with the person conducting the tour.
What Is A Remote Property Inspection?
In contrast, remote property inspections rely on third parties, such as local investors or professional home inspectors, to physically visit and evaluate the property on the investor's behalf. These third parties then provide their findings through reports, photographs, or videos for the investor to review and make informed decisions.
Why Investors Should Never Accept A Property Owner's Video As A Remote Property Inspection
Although a property owner's video walkthrough may seem like a convenient way to conduct a remote property inspection, it can leave you exposed to very high risks. The biggest danger lies in the fact that it is in the property owner's financial interest to avoid disclosing any serious problems with the property.
It's also much easier to conceal issues via a video call than during an in-person inspection.
To safeguard your investment, it's crucial to rely on impartial, professional opinions and thorough inspections. By doing so, you can confidently navigate the remote real estate landscape and make informed decisions that yield lucrative returns.
Inspecting properties remotely can be daunting - but it’s how real estate professionals go from good to great.
Another way they go from good to great? They utilize tools like Realeflow. Realeflow’s toolstack has everything you need to level up your real estate investing game and find killer deals faster than your competitors.
Want to see what Realeflow is all about? Grab a 7-day free trial here!