Why are Due Diligence Inspections Important to Investors?

For those interested in investing in a property, one of the most important steps in that purchase is the property inspection. There are many professional property inspection companies that carry out various types of inspections. However, this type of assessment is called a due diligence inspection. What is due diligence inspection? This article will explain the ins and outs of this type of inspection and why it is critical in the early stages of property investment. 

What is due diligence?

The process of Due Diligence Inspection is all about conducting all kinds of assessments and property inspections along with the reviewing any of the seller’s disclosures by the buyer. 

This can consist of:

  • The property’s physical condition
  • Damages to the property and bids to repair
  • Having a check and ensuring that there are no geological conditions, environmental issues, or any kind of hazardous substance on the property
  • Thorough checking of the land’s square footage if it is matching with the documents
  • The inspection of walls, roof, and foundation
  • Checking analysis of the AC systems, heating units, electrical wiring, plumbing, all appliances and fixtures
  • Any kind of restrictions, violations on the property lines

And many many more...

To explain it in simple language, the due diligence inspection is the process in which the buyer tries to understand the property’s condition in order to decide whether or not to proceed with the purchase.

Why is Due diligence important?

The inspection and thorough analysis might look very simple and doable. But in reality, it is not very easy to understand all the aspects of the property and what all can cause a conflict later. If things are clear before the purchase takes place, it would be easy to either get the issues corrected by the seller before the buyer signs the document. Or the buyer can look out for another option too. But if this due diligence inspection is not done right then the property would become a lifelong headache. Thus due diligence is important.

Real Estate Due Diligence Checklist

In real estate dealing, due diligence is performed to ensure that you are getting for whatever you are paying. This would leave the scope for renegotiations. Things to check in due diligence of real estate is a lot. So we have prepared a checklist for you. Check it out below.

  • Growth of job and population
  • Trends of household median income 
  • Amenities available and public transport accessibility
  • Ranking of the school and the neighborhood
  • Rate of unemployment
  • Rate of Crime
  • The trends of Business
  • Any latest development which could hamper or proper the purchase
  • The value trends of the property
  • The market trends for fair rent
  • The percent of a rented house
  • The trend of the market vacancy 
  • The collected gross rent 
  • The expenses for repair and maintenance
  • The fees of advertising, leasing, and management of the property 
  • Expenses of the insurance 
  • Tax amount

...and many more are there to list. 

Due diligence service offered by SGPNow

SGPNow is a professional property inspection company that meticulously does the inspection work. When it comes to due diligence a well-qualified field inspector would be sent to the property location. The inspector would walk around the complete property from outside to understand the condition of the exteriors. 

All the necessary checks would be done by the inspector and a thoroughly detailed report would be prepared along with proof photographs attached to the report. This will help the buyer to decide between buying the property or not.