Training & Education: Fireplace Inspection : Bryan Ellis Investing Letter

Just about everyone loves the allure of dancing flames and a warm fire. http://www.publicdomainpictures.net/view-image.php?image=2531&picture=done-with-the-mouse-time-to-relax

Most people like the idea of having a fireplace in their home, and investors and other real estate professionals know that a fireplace can be a major selling point. As a result, many investors prefer to buy properties with fireplaces whether they plan to flip or hold those properties because they know that the amenity makes the house more attractive. However, fireplaces are not all created equal, and they can actually make homeownership a nightmare if you invest in a problem fireplace. Make sure you?ve checked out the fireplace in detail before you commit to the purchase.

For starters, determine what kind of fireplace you are dealing with. Is it gas log or wood-burning? Gas log fireplaces tend to be less expensive than a traditional heater and may not even require a chimney, which cuts way down on maintenance costs and makes the fire-building process a breeze. Of course, you lose that romantic, woodsy smell with a gas log fireplace, but many people are willing to forego that in order to have a fire that they can turn off and on literally at the touch of a button or the turn of a key. Gas log fireplaces can often be adjusted for temperature also. However, either type of fireplace, in good repair, can be a bonus for any renter or buyer.

Once you know what kind of fireplace you are dealing with, determine the state of repair. Is the chimney necessary and, if so, is it clean and in good condition? Remember that if you are going to rent the property out, you will need to make sure that the chimney and the associated fireplace masonry is inspected each year to prevent a nasty accident. It is not necessarily wise to assume your tenants will do this. Also, regardless of whether the fireplace is wood-burning or gas log, make sure that the chimney, if there is one, is covered so that birds and squirrels do not use it to take shelter during cold winter months.

Finally, investigate your insurance options. What type of liability will you assume if you rent a property with a fireplace? How can you insure that your tenants will use it wisely? If you are selling the property as-is, make sure that your bases are covered so that if the buyer does not do the necessary repairs on the fireplace before use, you cannot be held responsible. It sounds heartless, but do you really want to take the blame if someone cuts corners on their maintenance and burns the house you sold them down? The answer is a resounding ?No!?

Does the presence of a fireplace make you want to buy a property or do you steer clear?

Thank you for reading the Bryan Ellis Investing Letter!

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Source: http://investing.bryanellis.com/696/training-education-fireplace-inspection/

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