Things to Check in Your New Investment Property Before Settlement

Buying an investment property is a major milestone, one that brings both excitement and responsibility. The thrill of acquiring a new asset can overshadow potential pitfalls, especially if due diligence is rushed. Overlooking hidden defects, unresolved legal complexities, or pest infestations may cause your investment to underperform, impact your returns, or worse, lead to unexpected expenses that disrupt your cash flow. This comprehensive guide outlines the critical checks you must complete before settlement, ensuring your investment is sound and your peace of mind remains intact.

Engage a Property Lawyer Early

From the moment you decide to make an offer, engaging a professional property lawyer from CMI Legal is essential. A seasoned property lawyer doesn’t just review contracts; they delve into the fine details, identifying clauses that may impose undue burden or financial liability. At CMI Legal, we assess title restrictions, easements, boundary disputes, and vendor obligations, issues that could leave you with ongoing liabilities or buyer’s remorse long after settlement.

By partnering with a property lawyer, you gain more than legal protection; you’re gaining a strategic advisor. Whether recommending amendments to special conditions, verifying compliance with strata rules, or aligning contract terms with your investment goals, your lawyer shields you from legal pitfalls. In short, engaging an experienced property lawyer ensures your transaction is secure and protects you from hidden legal pitfalls.

Schedule Building and Pest Inspections

One of the most crucial steps before settlement is organising a comprehensive building and pest inspection report from Apex Property Inspections. A glance during an open home may mask serious issues like structural instability, extensive mould, or pest infestations that can escalate into costly, time-consuming problems.

A building inspection covers a wide range of structural matters: from floor and wall integrity to roof health and foundation stability. It highlights evidence of water damage, improper modifications, or substandard roofing materials, issues that could cost tens of thousands to fix. The pest inspection component detects unwanted guests such as termites, white ants, rodents, and possums, otherwise invisible to the untrained eye. Detecting these issues early empowers you to negotiate with the vendor, requesting repairs, price reductions, or, in severe cases, withdrawal from the contract without penalty. Booking thorough building and pest inspections provides clarity on the property’s true condition and enables informed decision-making before settlement.

Check the Plumbing Before It’s Yours

Water is vital, but when it goes rogue, it can devastate. Plumbing issues often manifest slowly but can result in extensive damage to plaster, wiring, floors, and foundations. That’s why a pre‑settlement plumbing inspection is non-negotiable.

A qualified team from Wills Plumbing will conduct tests for water pressure, check the drainage systems, inspect the age and condition of hot water units, and assess visible plumbing infrastructure in bathrooms, kitchens, and external areas. They’ll look for tell-tale signs of leaks, water stains, corrosion, rusted pipes, or poor insulation around pipes, which can increase the risk of condensation and mould. Additionally, they’ll verify compliance with Australian standards to ensure there are no non‑conforming materials or unsafe installations. Having professional plumbers assess the property before settlement helps prevent unexpected repair costs and gives you peace of mind by ensuring that fundamental services are in top working order.

Don’t Overlook Pest Risks: Cockroaches Are Costly

While termites are commonly recognised as a serious threat to property, cockroaches are equally insidious. These pests are silent intruders, and their presence often indicates sanitation or moisture issues. Cockroaches spread allergens, contaminate food, and can cause tenants to complain or move out. Moreover, infestations can be notoriously difficult and expensive to eradicate post-settlement.

Key signs of cockroach activity include grease marks in cabinets, flattened droppings, musty odours near appliances, and sightings around plumbing fixtures or rubbish bins. Engaging Iconic Pest Solutions to handle cockroach pest control before settlement allows for early detection and treatment, preventing small issues from becoming big headaches. A professional will inspect, spray, bait, and set up monitoring tools, and advise on measures like sealing entry points and improving ventilation. Arranging cockroach pest control before settlement ensures your investment remains pest-free and habitable from day one.

Perform Electrical Safety Checks

Electrical faults are a leading cause of house fires, and older properties in particular may harbour outdated wiring, damaged switchboards, or unsafe power points. Before finalising the settlement, arrange a thorough electrical safety audit by a licensed electrician.

Power boards and switchboards should be examined for rust, overheating, or outdated components. Safety switches (RCDs) need testing to ensure they trip correctly under fault conditions. Wiring must be inspected for insulation wear, unauthorised DIY work, and overloaded circuits. The electrician should also check compliance with the latest Australian electrical standards. A professional electrical safety check not only reduces fire risk, but it also highlights hidden issues that may be costly or complicated to fix after settlement.

Inspect the Roof and Gutters

Tell-tale signs of roofing problems, such as leaks or sagging gutters, may not be visible during daylight viewings. Yet roof defects can cause serious internal damage, and gutters that don’t drain properly can lead to foundation saturation. Before settlement, arrange for a roof and gutter inspection.

A qualified inspector will check for broken or slipped roof tiles, rusted flashing, sagging gutters, blocked downpipes, and accumulation of debris. They’ll also assess roof ventilation and insulation, which is vital for maintaining comfortable interior temperatures and preventing mould. If defects are uncovered, the vendor may address these before settlement, or you may negotiate for repair costs to be covered. This helps keep your property dry, protected, and energy-efficient from day one.

Check for Asbestos and Hazardous Materials

Properties built before the 1990s often contain asbestos in wall cladding, floor tiles, guttering, and soffits, posing significant health risks if disturbed. Consider commissioning a hazardous materials audit to check for asbestos, lead-based paint, or other harmful substances.

This assessment is especially important in older homes where renovation or maintenance is planned after settlement. A specialist will take samples from suspect materials and determine whether they need removal or encapsulation. If hazardous materials are present, you can negotiate with the vendor to have them removed professionally before settlement, or adjust the sale price to reflect the future cost. Early awareness allows you to plan renovations safely and stay compliant with health regulations.

Verify Zoning, Council Records, and Utility Usage

Zoning and council records can significantly affect what you can do with your investment; you’ll want to know whether the area is earmarked for redevelopment, heritage overlays, or rezoning. Local restrictions may affect your plans for additions, subdivisions, or alterations. Ask your property lawyer to request council certificates, development applications, and record any notes on special levies or upcoming works affecting your property or suburb.

Similarly, check historical and current utility usage. If the property has been rented or vacant, request water and electricity histories. Arrange for meter readings on the day of settlement, and ensure tenants take over utility payments seamlessly if the property is tenanted. If the seller was on commercial or agricultural rates and they transfer to residential suppliers, it may affect costs, and you want to avoid any nasty billing surprises.

Assess Strata and Community Management

For strata or community-titled properties, the financial and administrative health of the body corporate is vital. Ask for the latest financial statements, balance sheets, and records of the sinking fund, which covers long-term repairs. Look out for pending or overdue special levies, which could amount to thousands.

Your lawyer or strata solicitor can help decipher the minutes of recent meetings to identify issues like building defects, proposed capital works, or legal disputes with the developer or other owners. Understanding the financial obligations and upcoming liabilities attached to the property ensures no unexpected levy demands arise after settlement.

Review Environmental Risk Information

Location-based risks like flood zones, bushfire-prone areas, or nearby contamination sites can severely impact insurance premiums, tenant demand, and resale value. Local council or state government sources will provide maps and risk assessments. Search for floodplain maps, bushfire risk zones, and any planned nearby infrastructure that could affect your asset’s value or appeal.

If concerns are highlighted, and particularly if environmental remediation may be required, build these considerations into your contract negotiations or cost forecasts.

Your Pre‑Settlement Checklist

Use this comprehensive checklist at your pre-settlement meeting:

Contract and title review by a property lawyer

Detailed building and pest inspections

Full plumbing inspection

Cockroach pest control and termite assessment

Electrical safety audit

Roof and gutter inspection

Hazardous materials (e.g. asbestos) audit

Council records and zoning review

Utility usage history and meter transfer

Strata or community financial review

Environmental and risk assessment

Document each inspection outcome, negotiate with the vendor to address defects, or allocate funds to escrow for pending works. This proactive approach empowers you to resolve hidden issues before they become investment drains.

Conclusion: Settle with Confidence

Purchasing an investment property is about more than closing a sale; it’s about acquiring a revenue-generating asset. Skipping or skimping on pre‑settlement checks puts your capital, tenants, and reputation at risk. By engaging key professionals, such as a CMI property lawyer, building and pest inspectors, Wills Plumbing for plumbing integrity, and Iconic Pest Solutions for proactive cockroach control, you can step into settlement with clarity.

With comprehensive due diligence, you’re not purchasing potential liabilities; you’re securing a robust investment. By ensuring structural, legal, environmental, and pest-related aspects are all in order, you confirm that your new property is a foundation for growth and peace of mind.

FAQs

Q1: Why is a property lawyer important during the settlement process?

A property lawyer ensures your contract is legally sound, checks for title or zoning issues, and helps you avoid hidden clauses that may lead to financial or legal complications post-settlement.

Q2: What happens if a major defect is found during the building and pest inspection?

If the building and pest inspections unco ver major structural issues or pest infestations, you may be able to renegotiate the purchase price, request repairs, or, in some cases, withdraw from the contract.

Q3: How can I be sure the plumbing is in good condition before settlement?

Hiring qualified plumbers for a pre-settlement inspection ensures there are no hidden leaks, faulty systems, or outdated pipes that could lead to costly repairs after you take possession.

Q4: Should I arrange pest control if the property looks clean?

Yes. Cockroaches and other pests often hide in walls or under appliances. Booking cockroach pest control before settlement ensures you’re not inheriting a hidden infestation.

Q5: Can I negotiate repairs or treatments based on inspection results?

Absolutely. Pre-settlement is the ideal time to negotiate with the seller for pest control, plumbing fixes, or compensation for identified issues. Your property lawyer can guide you through this process.