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10 problems to look for when viewing investment properties

For sale and to let boards outside Victorian terrace in Battersear

Buying a rental property is a big investment for the long-term, but buy to lets can so easily turn into money pits. When you’re viewing potential buy to let properties, the aim is to try and weed out those with problems that will cost more to fix than you’ll ever make in rent or capital gains. Or at least to have an accurate understanding of how much it will cost to refurbish so it’s in a fit state to let.

It’s all the more important now we’re in an era of high interest rates, which is squeezing landlords’ margins.

I’ve viewed a lot of properties over the past 30 years, and have learned from experience what to look out for.

Here are my 10 practical tips to help landlords spot the clues the property may be hiding problems that mean it’s more money and hassle than it’s worth. Or at the very least, problems you should which you need to factor into your investment case.

I’ve assumed that the property’s fundamentals for the target renter segment (eg rental demand, transport links, location, layout, building type etc) are all fine.

1. Does the property need expensive energy efficiency upgrades?

Graphic illustrating why it's important to look at the EPC before viewing a buy to let

Plans have been scrapped which would have required all rental properties to achieve an EPC rating of C or spend £10k on improvements. However, properties with an EPC Band D or E leave buyers with the risk that the legislation may be revitalised by (say) a Labour government. These properties are already less attractive to renters, who increasingly value an energy efficient property.

Even though it’s not compulsory to improve a property beyond an EPC E, it’s still worth factoring in the energy efficiency of a property when you calculate the value to you of a property.

An easy way of starting the analysis is to download the full Energy Performance Certificate (EPC) from the UK government checker to see what improvements it recommends. The estimated cost will be out of date, and it might not be accurate, but take a look at the big ticket items.

For instance, practically speaking, insulating a suspended floor is easy and fairly cheap to do if there is a cellar. This is because it is simple if messy to remove the cellar ceiling, put in insulation, and replace the ceiling.

On the other hand, if there’s no access to underneath the floor, it’s a big job. I viewed a property recently with an EPC E that had lovely floorboards in the reception rooms. However, I could feel cold coming through the gaps when I put my hand over them. The EPC recommended insulating this suspended floor. There was no cellar to this house, and no access to underneath the floorboards. I knew the floor would be difficult to insulate. First red flag for me.

Another easy fix is if there’s no roof insulation, provided there’s easy access to the loft and there isn’t an uninsulated loft conversion. Clearly avoid properties with spray foam insulation in the roof. It’s not worth the aggravation and you’re unlikely to get a mortgage.

Replacing an old style boiler with a condensing combi boiler, and upgrading the radiator valves to thermostatic radiator values is another easy fix. I say easy as it is usually fairly straightforward to carry out, but you’ll be able to get an accurate quote to factor the replacement into your costings.

Be aware that the more outside walls there are, the harder it will be to get an EPC C, without expensive wall insulation. This means older end of terrace, semi-detached and detached houses without wall insulation are usually costlier to get to an EPC C than mid-terraced houses.

A final thing to watch out for is that the EPC might be out of date or incorrect. I bought a house where the EPC said there was no loft insulation, whereas it had 150 mm. Check to see if the boiler has been replaced if the EPC says it has an old style one. You might have a pleasant surprise that the energy efficiency has improved since the EPC, but the seller didn’t bother to get a new one done.

>> Related Post: What landlords need to know about energy efficiency and EPCs

2. Is there evidence of damp and mould?

Potential source of damp spotted during a viewing for a potential buy to let
Check to see if the rainwater has somewhere to drain

Damp and mould can become a serious issue, as the sad death of Awaab Ishak has shown. Many properties, particularly older ones, suffer from damp and/or mould.

Here are some practical tips to help you spot signs of damp and mould when you view buy to lets:

  • Be alert for the musty smell of damp, particularly in cellars or bathrooms. Many sellers will try to cover it up with air fresheners, and open windows, so do keep an eye out for those.
  • When outside, check to see if the water has somewhere to run off. I took the above photo in a recent viewing and could see the water from the sloping north facing patio terrace had nowhere to go, other than into the back wall and foundations. The render and green algae are possible signs of a rising damp problem. It had been freshly painted on the internal wall, which increased my suspicions. I decided not to buy the property (this was one of many red flags).
  • Is there excessive condensation on the windows (or none, which shows they may have been dried off for the viewing)? This can be a sign of damp.
  • Look for discolouration or tide marks on the walls by the skirting board in converted cellars or ground floor rooms where there’s no cellar.
  • Wallpaper peeling off and discoloured paint are signs of damp.
  • Is there a damp proof course? If so, check for clues it may have been breached (eg debris in the garden, failed pointing).
  • Is there an extractor in the bathroom of kitchen? If not, there is a good chance that moisture won’t be able to escape properly and that there may be mould.
  • Is there enough other ventilation, for instance trickle vents in UPVC windows or vents if the chimney is boarded up?
  • Take a look behind furniture on the outside walls in particular to see if there are signs of damp and mould from condensation.
  • Damp and mould can also come from roof leaks, so look for signs on the ceilings (and also recent redecoration to cover it up).

>> Related Post: Landlord Guide: How to deal with damp and mould

3. Are there signs of movement / subsidence?

signs of subsidence - crack in bay window
These cracks in a Victorian bay window are signs of potential subsidence

Subsidence is usually a serious issue for home owners, and it can lead to the building’s collapse. Measures to repair subsidence, such as underpinning, are expensive. Unless you receive a substantial discount on a property with subsidence, stay well clear. You’ll need to declare it when you apply for landlord insurance.

You can see signs of potential subsidence in the above photo of a Victorian house I spotted recently. Here are other signs to watch out for on viewings for buy to lets:

  • Cracks around windows and doors, especially if they are thicker than a 10p coin (3mm) and you can see them both internally and externally.
  • Cracks that run through several bricks (as opposed to stress cracks in plaster or a single bricks)
  • Collapsing lintels
  • A diagonally positioned crack that is wider at the top and slimmer at the bottom 
  • Doors and windows that are sticking in their frames (although if they are wood, that can be normal swelling and contraction).
  • Cracks which have spread under the damp-proof course
  • Uneven or damaged floors – look for gaps at the corners of skirting boards.
  • Signs of filler and redecorating to cover internal cracks.
  • Recent rendering or repointing can be signs of covering up cracks. Differing gaps between the bricks on repointed walls can be signs of covering up movement.

Finally, it’s worth keeping an eye out for signs of subsidence in nearby houses. They might reveal a problem in the area, say building on an old brick field or on clay soil. A number of the neighbouring houses of the house in the above photo had similar cracks.

4. Do the external walls need expensive repairs?

Repointing the rear elevation of a Victorian house made of yellow stock brick
Repointing is expensive, but a better long term choice than render

Brick walls do need looking after. However, often landlords and home-owners alike are tempted to cover up problems with render as a cheap fix. But it doesn’t get to the bottom of the problem, and you don’t know what horrors it might be hiding.

I take a long time looking at the brickwork when I view a potential buy to let. Missing or crumbling/soft mortar needs repairing because driving rain can penetrate the wall and cause internal damp.

It’s possible to repair and repoint minor cracks, sometimes strengthening them with helical stainless steel reinforcing bars. However, larger, more sinister, cracks could be a sign of movement, as mentioned above.

In my last project, the rear elevation needed a lot of repointing (see above), which I factored into my costings. Being a landlord is a long term business. Although repointing is expensive, I think it’s better to repoint and repair the brickwork, than slap up some render and hope for the best. Repointed brickwork looks better aesthetically for renters, and means you can keep a closer eye on what’s happening to the wall.

5. Are there any hazards?

pond seen on a viewing for a buy to let
When I spotted this pond during a viewing, I immediately thought “hazard for children”

When you let a property, you need to make sure that it doesn’t have any hazards which pose a risk to health (see my blog post on landlord repairs for more information).

The test about whether something is a hazard under the  Housing Health and Safety Rating System  is subjective. This means that if you let to a family with children, the above ornamental pond is likely to be a hazard.

As my target market is families with children, I would have needed to remove the pond. That would have been another expense, and contributed to my decision not to proceed.

Other hazards include crumbling garden walls, uneven paving stones, and steep staircases without handrails.

Do also look out for Japanese knotweed, as that can cause a lot of damage to the property if not treated, and reduce its value. Make sure your solicitor specifically asks about it. Take a look at this website with pictures of Japanese knotweed in different seasons and tips to spot it.

6. Electrics – are they safe?

broken electric socket - a red flag during a viewing for a buy to let

Since June 2020, landlords have needed to obtain a satisfactory Electrical Installation Condition Report or EICR from within the last 5 years before they can legally let a property.

Theoretically, if you’re buying from another landlord, the property should already have a satisfactory EICR. However, this is not necessarily the case, as I found out on my last purchase (the landlord had received an unsatisfactory EICR and hadn’t undertaken the remedial work).

If the landlord has a recent satisfactory EICR, it’s likely the electrics are OK, but do take a look around for damaged sockets, lights and other problems. I always get an electrician to check everything before letting a new property, even with a satisfactory EICR.

On the other hand, if the property isn’t a rental, the electrics may well need upgrading. Rewiring a three bedroom house can cost over £6,000, according to Checkatrade. If you need to rewire, it might be easier and better long term to go the whole hog and go back to brick.

Tell-tale signs of a potential rewire include a dated fuse box, old-fashioned light switches, fabric-coated electrical flex, round pin plugs and old sockets.

If it’s only the fuse box that needs replacing with a consumer unit, that’s should be a lot cheaper than rewiring, at a little over £300. In either event, you’ll need to factor in the costs, and it’s worth getting a quote.

7. Does the boiler need replacing and are there TRVs on radiators?

radiator with discoloured floor boards
I spotted evidence of historical leaking from a radiator (with no thermostatic radiator value) on a viewing

Replacing a boiler is another big ticket item. A combi to combi switch cost me around £2,000 in June this year. However, going from an old system with a hot water tank, to a combi boiler is considerably more expensive, but it’ll improve your EPC rating.

Do make a point of looking at the boiler during a viewing and check if there’s a service history. Surprisingly, it’s not compulsory to service a boiler, even for rental properties. If it’s not been serviced or if it’s older than 10 years,, you’ll probably need to replace it.

However, it’s not just the boiler to look out for. Radiators can be a source of leaks (see the above photo taken on a recent viewing. Also, radiators without thermostatic radiator valves (TRVs) won’t be energy efficient. This means you’ll probably need to include an upgrade to TRVs in your costings to get an EPC Band C.

Leaking radiators can do a lot of damage to joists and floor boards, so do investigate any staining from leaks, like in the picture above.

8. What is the condition of windows and external doors?

rotten window frame

Windows are very expensive to replace. I recently replaced 3 small wooden windows with UPVC and they cost over £2,000 to supply and fit including VAT. A new composite front door costs £1,575 including VAT.

Consequently, rotten window frames like this one here will cost a lot to replace. Many sellers fill and paint window frames before putting the property on the market, so do look closely to see if there are signs of this form of “window dressing”.

Also, rotten windows may increase condensation and leaks, which in turn can cause damp and mould. If you see decaying window frames like this, it’s important to see if there’s any associated damp and mould. It all costs time and money to fix.

9. Do the roof and chimney need repair?

missing roof tile

A roof that needs replacing or even extensive repairs is another costly expense.

Try to have a close look at the roof for damage. This includes broken, missing or slipped tiles, or damaged flashings. You should also check for crumbling or missing pointing on the verges and an absence of underfelt. The gulley between the front and rear elevations is another area to check – I know from experience.

Whilst replacing a few roof tiles or some flashing might not cost the earth, if the whole roof needs to come off, that gets to be expensive.

A good tip is to take a look in the loft to see if you can see daylight coming through, condensation on the underside, suggesting a leak. Are there any signs that the roof is sagging or that the timbers are rotten?

Often fascia boards are rotten and need replacing, or at least repairing and repainting. Broken guttering and downpipes are important to fix as they can leak to damp issues. Although these jobs individually might not be a lot, they do add up.

Another thing to watch out for is a flat roof, particularly on an extension. One issue is ponding, when water stays on the roof and doesn’t run off. Long standing water will always find a way of escaping, and may mean through the roof over time. Anything green on the roof (weeds, moss, lichen etc) are signs that there’s been a build-up of water. Look for blistering and cracks to see if the roof is likely to need replacing. Take a look at the ceiling underneath to see if there are any signs of leaks (or recent decoration).

If you do buy a property with a flat roof, get a ladder and check it each year, taking photos. This will help with any insurance claim as you’ll be able to show “due diligence”, and you might be able to head off any problems by a preventative repair or upgrade.

Finally, take a good look at the chimney to see if it is leaning or needs repointing. If it doesn’t have a cap or wire on it, birds may have made nests in the chimney. This means it may need sweeping to improve airflow and avoid damp, if it’s not boarded up.

10. What is the general state of repair?

damage from misaligned downpipe to spot when viewing a potential buy to let
This misaligned down pipe caused this damage to the mortar

If a property is not in a general state of repair, it’s a good sign that lots of jobs will need doing to fix years of neglect. This means you’ll need to allow a bigger contingency, unless you’re already going back to brick.

For instance, take a look at the above photo I took when viewing a buy to let earlier this year. From the state of the pointing below the misaligned down pipe, I could tell the down pipe had been misaligned for some time. This was a good sign that the property had been neglected, which turned out to be a correct assumption. Everything needed replacing! Even the pan connectors of the loos had rusted, and were leaking. The boiler had never been serviced and was also leaking water from the condenser.

These needn’t be red flags not to buy the property, but just something to take account of when costing improvements. Replacing guttering and downpipes, and repointing brick, are surprisingly expensive.

Final thoughts

Unless you buy a new property, it’s likely it will need some form of refurbishment before letting. Especially if you buy it at below market value.

However, when you view a property, look for big ticket problems that suggest your investment may become a liability. Needing more money spending on it than it’s worth. Or worse still, become a health hazard for the people you rent it to.

Not all problems will need sorting before you let the property, but from experience, it is easier in the long run if you do as much as you can upfront. It’s never easy refurbishing with someone living in a property.

It’s also a good idea to talk to the neighbours as they may tell you about any problems, and you can get a feel for neighbourly relations. When I buy a rental, I give my card to the neighbours and ask them to contact me if there are any issues.

You might have noticed that I didn’t mention internal decoration or the replacement of bathrooms and kitchens. That’s because, it’s usually problems with the fabric of the building that end up being a drain on finances. Replacing kitchens and bathrooms is more discretionary, and it’s easier to factor into the investment proposal. It’s the hidden problems that can cause a buy to let to become a money pit.

Caveat emptor: buyer beware. So make sure you get a decent survey. Get your solicitor to ask lots of questions about the condition of the property. Neighbours can also be a good source of information. And above all, look out for traps for the unwary when viewing potential buy to lets.

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10 tips to help landlords spot problems when viewing buy to let properties.
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