3 Hidden Issues to Look for when Considering a Distressed Property for Purchase


If you’ve ever bought a distressed property or really any property for that matter, you probably already know the obvious signs of costly repairs. Sloping floors, water damage in ceilings and old electrical panels, siding repair, window replacement, new roofs, new electrical, new pumping, failing foundations, funky floor plans and everything in between are all easy to see problems that might mean big money to fix.


But what if you’re walking through a house that doesn’t look that bad? What if it’s ugly and dirty with a few cracked windows and peeling paint but there are no major signs of big glaring problems? Be wary because even houses that look perfect can be deceiving.

Here are three hidden issues to look for when considering distressed property for purchase.

  1. Check the grounding on electrical outlets when considering distressed property for purchase. Some homeowners and landlords will simply replace old two-prong outlets with the newer three-prong style. This could mean that you have old aluminum or even knob-and-tube wiring. Re-wiring an entire house can easily cost over $10,000. Use an electrical tester to check for grounding. If the power is off, pull out the outlet from the wall and look at the connecting wires.
  2. Take a close look at any fresh paint when considering distressed property for purchase. Fresh paint is often a sign of a cover-up, especially in distressed properties. People will cover up mold and urine stains on walls. If there is fresh paint on a ceiling it would be a good idea to check in the attic for signs of a water leak. If you see fresh paint on exterior siding or trim, take a closer look to see if there is rot that was just painted over.
  3. Look at the caulking around the bathroom tub when considering distressed property for purchase. Lots of caulking could mean repeated attempts at stopping water from running behind the top. Caulking that is dry, cracked and peeling can indicate a long-term leak that may have rotted wood in the walls and floor joists around the tub. Check around the tub for other signs of water stains or soft wood. If you can get under the house, check the joists for rot.

There is a lot of money to be made in distressed properties. But if you miss a repair or two in your initial budgeting, it will end up costing you much more money than you expected and could turn into a money-loser just as easily. The trick is to not rush your inspection. Take the time to look at everything carefully and don’t cut corners.

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