Highlights from this week:

Dr Andrew Wilson’s mid-term 2017 property report card
Would you rely on a property report generated by the seller?
What we can learn from President Trump.  Yes there are some things!
The formula to successful property investing
We tell you about ‘fractional financing’

Transcripts:
Some 'invisible' property investment issues – Cate Bakos
Kevin:  A property investment – or any investment, for that matter – is only as good as how it returns for you. What are some of the invisible issues that can undermine the returns on a property investment? Joining me to talk about that is Cate Bakos from Cate Bakos Property buyer’s agents based in Melbourne.

Hi, Cate. Nice to have you on the show again. Thanks for your time.

Cate:  It’s great to be here, Kevin.

Kevin:  Give me some of those invisible issues. What have you found, generally, that people tend to overlook that can impact their returns?

Cate:  Sometimes it’s not even overlooking or not being aware of them, but the invisible issues are the things that need to be done once you’ve purchased that property – and they can be quite costly. So you went into this investment thinking you had a 3.5% or 4% gross rental return, by the time you’ve fixed those invisible issues, you could be significantly down to early 3%s, and that can really hurt.

They’re typically things that you can’t see, and without due diligence, you might not know about them until the problem occurs.

Kevin:  List a few of them for me, Cate.

Cate:  For example, electrical: re-wiring, the need to re-wire or spend significant money on a property that has unsafe electricals. There are a few little hints that we can sometimes see, but it certainly doesn’t guarantee anything.

I think that having a qualified building inspection on the property, asking them to point out any concerns, is a start, but it’s important to note that a building inspector isn’t an electrician. So, they might see more warning signs than a normal buyer can see, and that’s a start.

Another one is plumbing. If you have some significant plumbing and drainage issues, they can certainly add to the cost base of the purchase, because works will need to be done to fix that up. They can range from hundreds of dollars to tens of thousands of dollars, depending on where the issue sits, so it’s a really important one to consider.

One of the most expensive invisible issues isn’t so invisible that people often underestimate them; it’s when you have significant movement on a property that needs more than just re-stumping; it might need soil engineers. The whole problem might be something that spirals into hundreds of thousands of dollars and that’s more than just re-blocking; it’s substantial works on a period home, for example.

Kevin:  It can be a lot of underpinning. Therein lies another problem, because those structural defects or the need for underpinning and how a building can drop sometimes can be hidden depending on weather conditions.

As an example, we found, in different parts of Australia, when the climate is moist or when there’s a lot of rain around, those cracks that could emerge actually close up because the moisture in the soil will impact on the foundation. So, you really do need a highly qualified person to give you an insight about the foundations, Cate, is what I’ve found.

Cate:  That’s right. I think if a normal building inspector suggested there might be an issue that needs a little bit of specialization, someone to have a closer look, I don’t think you can ignore that. We’ve walked away from many a property that has proven to be too expensive with all of the rectification work for investors.

Kevin:  What you’re suggesting is as well as a building inspection or report, you have to have one done on electrical, one on plumbing, and one on the structural integrity of the building. Is that right?

Cate:  It’s a hard one, Kevin, because