“With many of the old large houses that have been broken up into apartments, inspectors recommend looking at each of the units in the building because it’s impossible to generalize about the state of the entire property based on just assessing one unit,” says Bill Redfern, founder of A Buyer's Choice Home Inspections. “So, there are definitely potential problems in waiving the right to a property inspection altogether.”
It’s a hard lesson that a surprising number of property investors are willing to learn the hard way as they scramble to capitalize on hot rental markets across Canada’s urban landscape and the record-setting occupancy rates that fuel them.
The result is buyers are latching onto multifamily properties – any and everything from century-old apartment houses to newly repurposed mansions – as they come on the market.
In the ensuing competition for those properties, investors are performing their own perfunctory inspections and submitting offers without reserving the right to a proper inspection.
That decision often comes with tens of thousands of dollars in unexpected expenses – from the removal of toxic material to fixing the kind of hidden water damage Redfern’s high-tech equipment is focused on ferreting out.
Still, for some investors, that shortage of multifamily properties amplifies the importance of presenting a winning bid to a seller.
They argue removing inspection and financing clauses increase their chances.
But more and more buyers are expected to turn to inspectors in the short-to-medium term, say experts. Redfern may be betting on it, with plans to double the number of franchise operations across Canada over that time.
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