Understanding Property Due Diligence

Homebuyers are often encouraged to undertake due diligence before purchasing a property. But what does this term really mean, and how should it fit into the buying process? Due diligence is the thorough investigation of every aspect of a property that could affect its value and suitability as a home or investment.

Begin your due diligence before identifying a property to buy. Use tools like Develo to save time and deliver the majority of your due diligence from the comfort of your mobile phone or laptop.

Develo Property Due Diligence Checklist

Location

• Infrastructure: Is the property near public transport, schools, and shops? Are there plans for future transport infrastructure?
• Amenities: Are parks, cafes, restaurants, and leisure activities nearby?
• Development: Is significant development planned for the area? How will it affect the property's value?
• Neighbourhood: Is the area pleasant and desirable? Are the neighbours friendly?

Property

• Zoning: Are there restrictions on future buildings on the block?
• Rooms: Are all rooms marketed as habitable spaces under council regulations?
• Renovations: Have all buildings and modifications been approved by the local council?
• Ownership: Is it strata or company title if it's an apartment?
• Easements: Are there shared driveways or access points to be aware of?

Financial Due Diligence (thanks to our friends at  for the great recommendations)

• Mortgage: Have you ‘stress tested’ your finances for higher interest rates or reduced income?
• Lender Concerns: Be aware of factors that might raise concerns with lenders, such as properties in oversupplied suburbs or those with unique titles like company title apartments.
• Refurbishments: Have you considered the cost of necessary renovations, maintenance, and repairs?
• Pricing: Have you compared similar properties in terms of size and features? Is the property priced competitively?
• Demand: Can you sell the property quickly if needed? Will it rent out easily or remain vacant?

 

Bringing it all together

Conducting thorough due diligence is crucial when purchasing property. By investigating every aspect of the property, you ensure that it meets your needs and is a sound investment. Always take the time to research, consult the right reports, take advice from professionals, and make informed decisions to avoid future regrets and maximise your investment.