10+ Things to Inspect Before You Buy a Rental Property (Foundation to Roof)

0:00Most buyers walk through a house thinking about paint colors and kitchen counters. Ellie Ridge grew up scaling rooftops and crawling through half-framed walls with her contractor family.

0:10Tony Robinson:And today, as a top 1 % realtor, she's going to show you exactly what to look for before you ever even sign on the dotted line so you don't inherit someone else's six-figure nightmare.

0:25This is the Real Estate Rookie Podcast. I'm Ashley Kerr.

0:29Tony Robinson:And I'm Tony J. Robinson. With that, let's give a big warm welcome to Ellie. Ellie, thanks so much for joining us on the Ricky Podcast today. Thanks for having me. Now, Ellie, you've said you were literally scaling rooftops and walking through half-framed homes as a kid. What did that childhood do to you to see a house when you walked through the front door? Yeah, my dad's a contractor, and so that is just about visiting my dad at work in particular. He's a roof framer, so I have a special interest in roofs and how they're framed and framing generally. But it is helpful to walk through a house and know what is behind the walls and what's underneath the floors, because that is where expensive problems often lie.

1:14Tony Robinson:And the piece of homeownership that I think feels very intimidating to new homebuyers. I think the intimidating piece is so correct, right? Because for a lot of first time investors, maybe the only home they've ever purchased is their primary residence. And And that's a very different decision than buying an investment property. And I think there is, Ellie, like a massive gap between what a buyer sees as they walk through a property and what's actually happening inside the home's bones. Where does that gap maybe cost buyers the most money? Like not being able to actually know what to look for.

1:50Tony Robinson:Like what system in particular? Just generally speaking, like where have you seen people get into trouble by not looking at a property with the right lens as they're doing their walkthroughs? Well, where I work, we don't have any new construction. So all of our homes are about 100 years old in the Bay Area of California. So it can be catastrophic if people aren't looking into the systems beyond like a remodeled kitchen or like a nice backyard. Replacing a foundation or rewiring a home is is very expensive. So not budgeting properly for not just what your home will cost, but what it will actually cost to take care of and maintain and live there as a responsible homeowner are very different numbers.

2:37Tony Robinson:So a lot of what I do with clients when we're initially looking at homes and doing our due diligence is start budgeting for what the next five years will look like after they've purchased the home itself. Let me just ask, right? Because there's cosmetic renovations and then there's, you know, more structural renovations. What are the things that maybe can lull someone into the trap of thinking that a home's been renovated properly, when in reality it's maybe just like lipstick on a pig? If it looks really beautiful, that we've all had that emotional experience of walking into a home that has been like beautifully renovated and remodeled and people fight the urge to say like, this house has good bones.

3:19Tony Robinson:And what they're referring to is that it looks really pretty, I guess. But what, I mean, it's not that that's not important. Like redoing a kitchen is very expensive and invasive in your life. And it's wonderful if it's already been done for you. But that doesn't go hand in hand with systems having been updated, obviously. For a couple of properties that I've bought, like some of the, You know, they were rentals that were sold as completed and renovated. And a lot of the things that you can like look at is just like look closely, like trim pieces not matching up, like, you know, just different things that don't make sense into the property when you really like look closely.

4:02So if you're already seeing that the cosmetic wasn't done correctly, then there's even more of a chance you should be digging deeper. But when you're purchasing the property, you should, at least in New York, you're getting a disclosure of when everything was last updated on the property, any problems the owner is aware of. And you can look on that sheet, too, to see when was the electric last updated? When was the HVAC last updated? When was the roof last replaced? And that can kind of help you gauge like, okay, they did this full remodel. But yeah, it's saying that, you know, the hot water heater is, you know, 20 years old, the furnace is old, and the electric hasn't been updated since it was built in 1960.

4:45So I think using the information in front of you, and also, you know, going and having eyes on the property or somebody that can and kind of using those two things together will really help.

4:57Tony Robinson:Yeah, we get reports here too. In what state are you in? I work in California, particularly in the Bay Area. Okay, okay. And Tony in California and in Tennessee where you've invested too, they all provide disclosures too? Yeah, yeah, to a certain extent. But, you know, even on those disclosures sometimes, like you can just say like, I don't know, you know, or like unknown. That's what I put when I fill it out.

5:21Or NA or I don't know. Yeah. Yeah. Okay. So the next thing I want to talk about is besides walking through the home and looking at the property is you've actually built a 255 ,000 following by teaching people about houses on Instagram. What was the moment you realized that most buyers aren't knowledgeable about what to look for when they're making the biggest purchase of their lives almost completely blind?

5:47Tony Robinson:Yeah. I started making that page when I was a really, really new agent before I was even licensed. I worked with my mom. And so before I had my license, I started going out on broker's tour with her, which is the day that agents tour all the new property, the day after they go live. It's Thursdays in this area. And I was walking around, seeing all these amazing houses. And I don't know if you guys have this experience. Are you guys realtors? No, neither one of us. No. We have no desire for paperwork. We're too lazy. um when I first was licensed as a realtor every house was like so amazing and mind-blowing to me and like I was in the nicest houses I had ever been in I was like oh my god it's so intense like it was so amazing crazy and so I started making these little videos like genuinely like tripping out about the houses I was seeing and how how cool they were and all the weird stuff I was seen.

6:43Tony Robinson:And then that evolved because I think people are interested in weird stuff about houses. And so I sort of backed into it. I made those videos from a place of being excited and curious myself. And then I started noticing like, oh, this could be a really real way that I'm like practice a little bit differently and really help people feel more confident like buying a house because I have a little bit of a unique knowledge set, you know, and my mom works the same way. We're both very like looking in crawl spaces, looking in attics, talking about systems. And I don't know other agents that work quite the way that we do.

7:29So, so now we know what Ellie is looking at before she walks in the door, but once she's inside, it's a different game entirely. After the break, She's going to walk us room by room through the things that can quietly cost you tens of thousands of dollars and that your standard inspection might completely miss those. We'll be right back. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast, easy? Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites. Indeed's sponsored job posts help you stand out and hire the right people quickly.

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10:38So let's start at the foundation and kind of work our way up. What are the things that you're physically looking at in a crawl space or a basement? And what does it mean if you find those things?

10:48Tony Robinson:Yeah, so there's a lot to talk about before we even go inside the house. So I'll meet my clients outside and we'll walk the perimeter. There's a lot of things that I want to point out depending on the style of the home and the construction methodology of that style and that era. um so typically what i'll look at first is the roof line and that will tell us a lot about the risk for moisture damage to the framing depending on if there's overhangs or if it's a flat roof or a low slope roof um and then i might talk about what gutter you know like what gutters there are like if they're integrated gutters or if they're just standard gutters that hang on the fascia of a roof and that just is a vulnerability or or not so we might talk about that um and then i'll find the hatch which is the little door that looks underneath the house and in this area we have raised perimeter foundations not slabs very typically um and not uh like posted pier which maybe you see a lot of in texas um so we can open a little door and look underneath to like a three foot tall crawl space and that shows us the foundation and the condition of the soil and the condition of what's called the cripple wall which is the short framed wall between the top of the foundation and the underside of the floor framing of a home that shows us a lot of things because concrete is very expensive and so the condition of the foundation is like my first concern usually um also because i live and work in earthquake territory we're overdue for a major earthquake along our local fault line called the Hayward Fall.

12:28Tony Robinson:So this is what I always warn my clients of is that it's very likely that in the time that they own whatever home they're buying with me, there will be a catastrophic earthquake, not to be a downer, but like it's coming. And so these homes when they were built originally had very minimal, if any, seismic reinforcement, meaning the house being bolted down to its foundation or being rigidified laterally. I mean, I could go and I don't know how interesting this is for this podcast, but I could go into a lot of detail about the kind of stress a home experiences in seismic activity. But needless to say, the house does need to be bolted down and that little framed wall needs to be braced.

13:11Tony Robinson:So I'm looking for evidence of that. Usually it's not there. and if it's not we'll talk about what that might cost and the fact that that needs to happen right away before people are sleeping in the home or having their kids sleep in the home and so on a lot of houses in this area are split level homes like you walk up walk up some stairs to go in and walk up a half story to go up to a bedroom that's over a garage that's called a soft story condition and it's its own kind of seismic retrofit so we'll talk about costs there so these are just like common things I observe outside. Ellie, I just want to pause you there because like you just, you just listed off a bunch of things that I never would have even thought to ask.

13:51Tony Robinson:Where, how do you start building this knowledge base? Like, did you get some sort of, some sort of certification? It's just, you, you walk so many houses and talk to so many contractors. Like how does one actually start building the level of knowledge that you've accumulated from, from the work that you do? Yeah. Everything I'm talking about is called out in home inspections for the most part in maybe less language, like with just fewer words and less detail. So if an agent is like a student of home inspections, which they should be, a lot of this, you know, you'll see time and again, and then you'll start to be able to observe and point out yourself.

14:33Tony Robinson:In particular, my dad, like I said, is a contractor and he himself is a licensed home inspector and just kind of like a building nerd. And so that's what my dad and I talk about when we hang out. That's our quality. I'll go on inspections with him or visit him at the job site. It's something we have in common. So it's very bonding for us, but it's also good for work. Um, and so I have this great resource in, in my dad, but none of this information is difficult to access if you're a realtor who is like curious and interested. Um, you can, you know, in, in this area, we have home inspections as part of our disclosures.

15:19Tony Robinson:You guys were talking about like seller disclosures. We have seller disclosures, but it's also standard of care to provide a home inspection. There are varying levels of quality. Like some home inspections, I could write a better report, frankly. Like I can call things out that aren't there and some are really, really great. And they're like the home inspectors that I really trust and admire and have learned from. So anyway, long-winded way to answer your question that read home inspections. So that's the basement or the crawl space area. Let's maybe go to the electrical panel next. This is one of the things that a lot of buyers almost never look at.

16:01Tony Robinson:What should they be looking for and what are the red flags that could affect maybe insurance or even worse safety? Yeah. So starting on the outside of the box, if it's rusty, that's already a red flag. You don't want water dripping down onto your panel, as you can imagine. Um, people should be really careful opening electrical panels because inside the door, there's what's called a dead front cover that's blocking the like live drop from the city or county. And if it's missing and something touches it, you will, you will die. I mean, it will be a really horrible electric shock. So, um, I open them all the time, but just be very careful as you're opening them.

16:44Tony Robinson:But once you open up inside, you should see a bunch of breakers. Those are the little switches. And the amperage is listed on them. Amperage is like the, you can think, I forget the analogy. There's like an analogy about flow of water. Oh, I was just saying like the capacity of how much electricity can flow through, right? Yeah, it's like the capacity. And if there is less capacity, or excuse me, more capacity flowing through it, then the circuit can handle, the breaker will pop. So that's an overcurrent protection device. It keeps you safe from fault conditions like being electrocuted or like an electrical fire or something.

17:26Tony Robinson:And we have modern devices inside electrical panels called arc fault circuit detectors and ground fault circuit interrupters that can sense misbehavior basically of current, like jumping between lines, that's called arcing, that can cause a fire or current leaving and not returning to the circuit, which means it's traveling through your body and quacking you, that automatically pops breakers. But when I'm just looking at a main panel, what I'm pretty much looking for is the full, the capacity. If it's 100, 125 amps or 200 amps, And that just tells me how much capacity is left and if people can electrify further.

18:07Tony Robinson:I don't know what the discourse around electrification is in your areas, but people talk a lot in Berkeley about electrifying their homes. So that just tells us, like, are you if you want an EV charger, do you need a new panel, basically, or like a heat pump or these other modern electric dependent ways to service your home? And then I'm also looking for the famous problematic brands, Zinsco, Sylvania, Bulldog Pushmatic, Federal Pacific. Those all just need to be replaced right away because they have like various. I bought a house once that was Federal Pacific. It was the second duplex I ever bought.

18:44And right away, the inspector's like, this is a fire hazard. You've got to get this out of here. And he said, too, like your insurance will probably if they come and do an inspection, they're not going to insure you because you have this box in there, too. So that was one of the things that we had switched out right away when we bought it.

18:59Tony Robinson:Yeah. My house has had a federal Pacific panel. But so that's just more cost, right? Like when I'm walking through with buyers, we're doing a tally to figure out like, does this house, is this, can you afford this house and the projects it needs, right? It's like all those little things, like sometimes looking at an inspection, it's like, oh, there's nothing major. It's just these little things here and there. But those little things can start to add up and add up and add up or become bigger issues down the road if you don't take care of them right away. Or the other direction. Like I feel like the inclination of a lot of buyers is to read a panel or excuse me, read an inspection and like feel really concerned about the things.

19:41Tony Robinson:Because it's like, of course, you don't you don't know what is scary or not. You're doing your best to parse it out. but often the things that feel really alarming in a home inspection aren't a big deal and the stuff that is a really big deal and is really expensive is not um like bolded and highlighted as much it's kind of funny I notice we just interviewed a guest Justin Witted on and he bought a property that was full of mold and I guess it was a section of the area that was mold and it was like two thousand dollars you know you think of mold and this big scary thing and it was like one of the cheaper costs to his$90 ,000 renovation, you know?

20:21So yeah, I think there is that like misconception and you have to go and get your quote and actually know what it would cost. Now, Ellie, what about the roofs? So roofs are one of the most negotiated items after a home inspection. What does a buyer need to know before they're at the table arguing over who's going to pay for the new roof?

20:42Tony Robinson:Well, that is not the cadence where I work. We don't, we typically don't write with inspection contingencies and then negotiate based on findings. We actually tend to write fully non-contingent offers and do all of our due diligence in advance. I have never negotiated for a roof replacement. Also, I would never be surprised that a roof needs to be replaced. I can see instantly if it needs to be replaced. So I can't imagine a scenario where I would be like, terrible news. I'm just finding this out. But here's what I'll say about roofs, I, they're not a big deal. Like it's not a big deal. Like it's over in two days, the roofers come, they do it and they go and they give you the bid in advance.

21:21Tony Robinson:Like people need to relax about roofs. Well, let me, let me ask you follow up questions, right? Number one, um, what, you know, for you, when you go and see, see a roof, what are the things you're looking at to say, okay, this actually needs to be fully replaced versus maybe just like patching certain parts of the roof. And then what is the tip? Like say we need to do a full roof replacement. And obviously this is going to be very specific for the Bay Area, but what are you spending right now to replace a roof? In this area, it's like$25 ,000 for a new roof. So it's not that it's not, you know, a material cost, but those projects where it's a set cost that you agree to and one trade comes through and it's over in a matter of days.

22:03Tony Robinson:To me, that's like very easy to wrap my head around. Signs of failure in a roof. So the most common roofing material in this area is called composition shingle. Is that the case for you guys? It's the shingles with like, they're like asphalt or they have little porcelain granules on them. Asphalt shingles, yeah. And metal roofs are common for me. Yeah. We don't have any metal roofs out here, but yeah. They're not metal. They have like, they're a fiberglass and then they have like little granules on them. I think that's probably the most common roof type in Southern California. Yeah. No, I said that we have metal roofs.

22:39That's why he was saying that.

22:40Tony Robinson:Yeah, sorry. I just wanted to ask you. She used to have metal roofs in Buffalo. Yeah, yeah. We have the asphalt shingles, and then we also have the metal roof. Oh, not like really? Because it snows? Yeah. They last way longer, the metal roofs. They're more expensive, but they're a little more and more common. They're amazing. Like a standing seam, right, with like a flat and then like the seams. Yep, yep. yeah they're awesome well in this yeah so that no sign of failure they'll never fail they like have a 100 year life but comp shingle which is what we see most frequently in california i think it's the most common roofing type in the country um signs of failure are uh like cupping of the shingle itself like it's beginning to cup up curl up at the edges um cracked like cracked shingles obviously missing shingles but primarily granule loss so composition shingles are made of like an asphalt bituminous bitumen is an asphalt material with added polymers but anyway whatever we can just call it asphalt for our purposes and then like a fiberglass mat and then these little ceramic granules that protect the asphalt from the sun because it it, like UV breaks down asphalt over time and then it starts to crack and then it's water permeable.