Along with your real estate investing coach, having the right home inspector plays a crucial part in your investment process...
It’s not breaking news that Home Inspectors play a crucial part in the investment process for any investor, and we all know there are some bad ones out there. In fact, Mike Holmes makes a living on TV by continuing to tell us how bad they can be.
As a real estate investing coach we get questions around inspectors all the time. Specifically, what makes a good one and how do you find one?
Like any industry, there are great inspectors, terrible ones, and all levels in between. So how do we go about trying to find the good ones to work with?
The first thing you should know is that there are no requirements to be a home inspector. If you wanted to be a home inspector tomorrow, print some business cards and away you go!
Crazy, isn’t it?
This obviously drives good home inspectors nuts, since many unqualified people will do cheap inspections, and claim they are providing the same service as people with years of training and experience.
So where do we turn?
The first place to look is the Canadian Association of Home Property Inspectors (www.cahpi.ca). This association provides an RHI (Registered Home Inspector) designation to home inspectors.
Does obtaining this designation automatically mean they are a good inspector? Absolutely not.
But it’s a start.
Obtaining the designation can be a lengthy process. It requires a combination of courses focussed on the building code and different systems in a property, and 150 property inspections. That is the initial phase.
There is also some technical background required which will often be proof of some other skills. Training as an engineer, architect, plumber, carpenter, and other professional designations would qualify.
You can see that earning an RHI designation requires work, knowledge, and experience, all things we look for in an inspector.
As a real estate investing coach, we have found that the past experience of the inspector is often most valuable. For example, if someone has worked as a licensed electrician for a number of years they often have a good understanding of other systems within a property.
Or if they have been educated as a structural engineer, that would bring more insight than almost any course they could take.
But, like anything, there are no guarantees that what they are telling you is accurate.
There is no replacement for having your own understanding of a property. It allows you to make your own decisions.
The second set of eyes an inspector brings are valuable, but they should definitely not be looked at as the final say.
We have had furnaces that were weeks away from being junk, chimneys that were supposed to fall off the house, and roofs that were built to leak in our properties, or so we were told.
But often these things were blown out of proportion by good inspectors that we know, like, and trust.
We decided to go ahead with the investments, and they all worked out well.
In fact, one of our most profitable investments ever, was purchased after one of our long time inspectors told us he thought it was a bad idea.
He was a great inspector, but when it came to understanding what we were doing, he didn’t fully get it. That’s not a bad thing, but you need to be aware of that if you value the advice.
Do inspectors miss things? Of course.
That is why they are a second set of eyes, you are the first. Don't forget that they can’t start poking holes in drywall, or pulling up carpets - they are supposed to leave things untouched. This provides some limitations as to exactly what they can uncover, and can lead to some surprises.
The home inspection process isn’t perfect. But what is?
As far as we can remember, we have never purchased a property without a home inspection, it has always proven valuable.
But we have never made the choice just about price. If you are still unsure even after tracking down a few qualified inspectors, ask someone you trust for a referral, or if you are working with a real estate investing coach you can consult them as well.