Flint Foley Real Estate Blog

Purchasing a house is a huge step for many people. It is a smart move, and often a mandatory requirement by a funding source, to have the home inspected prior to purchase. This step will help the potential home buyer weed through the lemons on the housing market and become aware of issues that need attention prior to purchase.

1. Is It Okay to Perform the Inspection Myself?
Inspecting your own potential house is not recommended. Home inspectors are specially trained to look for things you may miss. Unless you are a home inspector yourself, seek out a professional. Some states or financial lenders require a licensed inspector to complete the inspection.

2. What Is the Cost of a Home Inspection?
The cost of a home inspection usually comes out of pocket for the potential homebuyer. Shop around and talk to a variety of home inspectors, especially if you have never used one before. Keep a running list of comparative information on each inspector. Costs can vary, depending on the size of the home and the region in which you are making your purchase. According to the U.S. Department of Housing and Urban Development, a typical range might be between $300 and $500.

3. What Is Covered Under This Inspection?
Not all home inspectors cover the same things and each state has legal requirements for home inspections. This does not guarantee that the inspector you choose will automatically inspect for those required items. Before calling your list of inspectors, make sure you that you educate yourself on the list of state requirements for inspections.

4. How Much Experience Does the Inspector Have?
Inquire about the inspector’s level of experience and ask for references. Inspectors who are confident in their service should willingly supply you with a list of references that can confirm they provide quality service.

5. How Long Will the Inspection Take?
​Knowing the length of time for an inspection is important because you usually have to arrange a time with the realtor and the current owner for the inspector to examine the house. Since an inspection usually involves looking at pipes, wiring, roofing, and areas that may be hard to reach, it may require hours to complete. The home inspector you choose should provide you with an accurate estimate of how long the inspection is expected to take.

6. Does the Inspector Need to Specialize in Residential Inspection?
Ask about an inspector’s specialties. There are various types of real estate, and all need varying forms of inspection before purchase. Commercial real estate is different from residential real estate, which is different from multi-family real estate.

7. What Type of Inspection Report is Supplied and How Long Does it Take to Submit?
In many states, a report showing that an inspection was completed and what the inspection found is required before purchase. As with the specific state requirements for what is inspected, there is usually a requirement for what is listed on the form.

8. Is Anyone Allowed or Required to Attend the Inspection?
The home inspection is a valuable experience for you as a home buyer and future home owner. The inspector should allow you to attend the inspection. You will be able to see first hand what potential problems exist now or may arise soon. Knowing what looks normal and what a problem looks like will help you later in maintaining your home.

9. Is it Possible for a Home to Fail an Inspection?
The inspection is designed to tell you what needs to be repaired on the house. There may be some requirements that the house needs to meet in order for your financial lender to lend you the money for the home. This does not mean that the house has “failed” the inspection and will not be able to be sold.

10. What Happens if There Are Problems Found During the Inspection?
There are potential problems that can come up during inspections. The seller of the home is not automatically required to repair any problems that the inspector finds. As the buyer, you can negotiate for the repairs to be made before you buy the home. If the seller is not willing to do the repairs for you, you will need to make other arrangements or terminate the contract. If you still want to purchase the house but are unable to get the financial lender to approve the loan until the repairs are made, you may have to make the repairs at your own expense.

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​If you own apartments in Los Angeles, you might not know about one of the most valuable programs available to owners. It’s through the Los Angeles Housing + Community Investment Department (HCIDLA) and called the Capital Improvement Program. It has the ability to have a truly major positive impact on your profits.

​The concept is simple: You are eligible to recoup from your tenants as much as 50% of the cost of major improvements to your property, by applying to HCIDLA for this specific program. Don’t be intimidated — the application process isn’t difficult.

The Rent Stabilization Ordinance (RSO) identifies capital expenditures as costs spent to improve a rental unit or a housing complex's common areas with updates or additions that last at least five years and meet other stipulations. Renovations or additions like a new roof or siding, updated carpeting or draperies, a new or repaired swimming pool or hot tub, fencing, washers and/or clothes dryers and the like all qualify. Simply put, a capital improvement must primarily benefit the tenant rather than the landlord and cannot be normal routine maintenance or repair work to the rental unit or building.

If a light bulb just turned on in your head because these criteria apply to an improvement you plan to make (or have made in the past year) to a building or unit you own, there's good news: You're likely eligible for a capital improvement rent pass-through.

As property managers in LA, we’ve seen firsthand the world of difference this program can make to our client’s bottom line. For example, an owner we manage for was recently despairing over the cost of a new bathroom he was about to construct for a tenant of his rent-controlled apartment building. After we filled out the application for the capital improvement rent pass-through, the HCIDLA approved it, and the owner was able to charge the tenant 50% of the cost to remodel the bathroom. Most repayment schedules have the payments broken up over five or six years. This might sound like a long time, but an alternative thought is to simply think of this method of recapture as being an avenue to roughly double the allowed 3% annual rent increases, with improved buildings as the result.
Before initiating, it certainly makes sense to think through your approach with your tenants. Prior to announcing an increase in their rent payments based on a capital improvement, you may want to meet with the tenants to present the details of the project to them. Here, you can outline how the proposed work might impact them from a standpoint of affecting the use of their home, and also the benefits they can look forward to after the improvement. Emphasizing what is being done to improve their living conditions is important.

A wise place to begin implementing these improvements is with those upgrades or additions that will substantially impact the attractiveness of buildings. Not only will this invite tenants to take notice of where the money is going and truly appreciate the improvement, but it will also show up in the form of increased rents when vacancies are filled. Smart owners know buildings with exteriors and common areas that catch the eye also catch higher-paying tenants. That’s an especially savvy practice when half of the cost is passed onto existing rent-controlled tenants.

​Have you been putting off that new roof? What if you could cut the cost by 50%? Talk to your accountant about this program and its implications. They may have additional ideas and valuable thoughts from their own experience in helping other investor clients they work with. If you even think you might qualify for capital improvement rent pass-through on any of your recent or upcoming building improvements, begin exploring your options today. In a climate where landlord’s rights are diminishing, this program is a triumph for owners. Don’t just improve your property — improve your returns, too.

​As any business owner knows, sometimes you have to provide incentives to acquire and keep customers. The same principle applies to landlords. There is a rental property on every block, and though your unit is special, it’s not that special. To find and keep great renters, a landlord will often have to provide incentives.