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Last updated: January 5, 2024 • Home Improvement

4 Red Flags to Watch Out for During a Home Inspection

Adding a new rental property can be exhilarating, from contacting the right real estate agent to scouting the best neighborhoods for long-term ROI. During that process, some property owners prefer to invest in fixer-uppers to flip into a rental with great returns quickly. However, knowing precisely what you’re getting into before you finalize a sale would be best. 

Are you looking to avoid buying a money pit? Do you know what potential issues could impact your investment? Stick around; this article unveils four red flags that can surface during a home inspection. From structural concerns to hidden defects, arming yourself with knowledge can help you make an informed decision about future sales. So let’s dive in: 

4 Red Flags to Watch Out for During a Home Inspection

watch for the red flags
  1. Structural Issues

When house hunting, ask if the building has any hiccups. Cracks in the foundation, sagging walls, or uneven floors can indicate structural problems. Due to the complexity of their nature, these issues may pose significant challenges to rectify. Property owners stand to incur substantial repair costs, which could significantly cut into your profits. Thus, purchasing a home with structural issues requires careful consideration.

  1. Water Damage and Mold

During home inspections, watch out for signs of water damage and mold. Stains on walls or ceilings, musty odors, or visible mold growth are red flags. Water damage can lead to extensive problems, eventually affecting the structural integrity of the building. Besides that, mold is a health concern, compromising the safety of occupants and leaving landlords liable to suits. You should hire a reliable Washington DC rental property manager to discuss safety concerns during inspections to minimize your legal risks. 

  1. Electrical Concerns

Overloaded circuits or faulty electrical systems pose fire hazards that could endanger the safety of your tenants at a later time. Moreover, houses with outdated wiring are often no longer up to code with housing regulations, which could result in fines. Thus, inspecting the electrical infrastructure thoroughly is crucial to identify potential dangers and ensure the home meets safety standards.

  1. Pests Infestation

While finding a roach or two might not be a red flag, a pest infestation is undoubtedly cause for worry. Holes in the wall, chipped wood, and animal droppings could indicate a potential property already has occupants. Termites, rats, roaches, and squirrels aren’t uncommon in older homes that have been unoccupied for several months. Hence, conducting a comprehensive inspection, including behind-the-scenes areas, is essential to uncover any hidden pest infestation. 

How to Identify Low-Ballers in a Home Inspection

wooden blocks low rates

Home inspectors with low rates can be a sign of compromised quality in terms of thoroughness or attention to detail around the home.

Check if the home inspector is certified and experienced in this field. Accredited inspectors usually adhere to certain industry standards. Another way to confirm the credibility of inspectors is to ask for trusted referrals from past clients. Reputable inspectors with a history of satisfied clients are typically eager to share this positive feedback.

A professional home inspector takes their time when completing a home inspection using professional-grade tools or equipment. Finally, professional inspectors should provide a clear and easy-to-understand report, along with photos that are important for documentation. 

Finding the balance between cost and quality is crucial. Therefore, choosing an inspector is important based on their expertise and reliability rather than solely on price. If homeowners question the quality of their inspection, it’s best to consult another experienced home inspector to avoid potential issues.

How to Address these Issues before Finalizing Sale

engineer structure construction

1. Consult with a Structural Engineer

Keeping up with rental compliance requirements is crucial to maintaining your house’s integrity. So, if you’re interested in purchasing a home with issues related to the foundation and walls, consult a structural engineer. These professionals can assess the severity of the problem and provide recommendations for repair. Using their suggestions, you can obtain estimates from qualified contractors to understand the potential costs of an extensive restoration. Ensure you negotiate with the seller to address the issues before finalizing the sale or adjust the purchase price accordingly.

2. Hire a Certified Mold Inspector 

If water damage or mold is one of the red flags you encounter, you should hire a certified mold inspector. They can evaluate the extent of the mold issue and identify its source. With that knowledge, you can address the root cause: a leaky roof or a plumbing issue. Also, engage professionals to repair any water damage before buying.

3. Bring in a Licensed Electrician

Bring in a licensed electrician to assess and rectify any electrical issues identified during the inspection. Whether it’s rewiring, updating the electrical panel, or addressing specific safety concerns, having a professional address them would yield the best results. Before finalizing the sale, remember to obtain a detailed report and ensure that all necessary repairs meet safety standards.

4. Call an Exterminator

Finally, call in an exterminator to deal with pest infestations. One of the solutions they recommend is a building treatment. This project involves deep cleaning with unique products to kill off the insect population. In some cases. It might be necessary to tent the house to confine the toxic chemicals. Effectively addressing any pest infestation will prevent these issues before finalizing the sale and safeguard your investment. 

Estimating the Cost of Repairs Needed in the Home

home model repair costs text

When estimating repair costs, it’s important to consider the extent of repairs, the home’s current value, and potential added value after repairs. Professional assessments done by home inspectors can provide great insights into the cost and value of repairs.

However, we all know that the cost of construction materials is on the rise. To combat this, homeowners can prioritize repairs based on urgency.  Another approach is to set aside 1 to 4% of the home’s value each year for ongoing maintenance and repairs. This is helpful for those homeowners who want to be prepared for any contingency. Lastly, setting aside $1 per square foot of the home is a great way to budget for potential repairs. For example, a home that is 1,000 square feet may need a minimum of $1000 for essential repairs and maintenance.

Is Home Insurance Vital to Home Inspections?

insurance policy legal view

Home insurance plays a pivotal role during home inspections for numerous reasons. First, it safeguards buyers and sellers against unexpected damages or liabilities that may be uncovered during the inspection. It provides a layer of protection in case any issues arise, such as structural defects, water damage, or other unforeseen issues.

Insurers may require homeowners to address identified repair needs in order to maintain their policy, and a failed inspection could lead to rate adjustments or policy cancellation.

Moreover, home insurance is often a prerequisite for mortgage lenders, ensuring the property is adequately covered in case of any mishaps before or after the purchase. To be presented as a low risk to insurance companies, homeowners can improve their rates by doing exterior and interior maintenance. Try to install safety and security features for investors, such as updated fire alarms, deadbolt locks, and security systems, which can potentially lead to policy discounts. Address any signs of damage, infestations, or maintenance from normal wear and tear.

This insurance coverage can mitigate financial risks and provide peace of mind to all involved by offering financial support for repairing or replacing damaged property. Homes that have not had an inspection in the previous 10 years, have a history of damage and are located in high-risk areas could be subject to further scrutiny. The results of these inspections help insurance providers determine the risk involved in insuring a particular property, which can impact the cost of the policy.

Ultimately, having home insurance in place during a home inspection is not just advisable but essential in safeguarding both the property and the individuals involved in the transaction. It provides peace of mind for homeowners by identifying issues before they become significant problems and minimizing the financial impact of damages.


Vigilance during the inspection phase is paramount, and knowing the four red flags to watch out for during a home inspection could help you make an informed investment decision. Structural issues, water damage, electrical concerns, and pest infestations are crucial indicators that demand careful consideration. With insights into these potential pitfalls, buyers can proactively address issues before finalizing the sale. If you decide to go ahead with a purchase, engage with qualified professionals to ensure comprehensive repairs. However, if you need assistance overseeing these repairs, hire a property manager who can successfully resolve the issues on your behalf and improve the chances of real estate success.


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