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Don’t be fooled by glossy photos: How to spot hidden issues before they drain your portfolio
When scaling their portfolio, many investors get seduced by glossy photos, but failing to spot hidden issues can cost them thousands. Here are the top three hidden red flags to take into consideration before buying.
Buyer’s agent and founder of the Kev Tran Group, Kev Tran, said that most property investors walk through a potential purchase and only see what’s in the photos, which can impact their long-term portfolio growth.
Tran said that a poorly selected property can stall capital growth, making it essential to inspect thoroughly and consider all the details that could go wrong.
“Unexpected capital works can absorb funds that would otherwise be used for deposits on future purchases,” Tran told SPI.
“Over time, this slows momentum, reduces borrowing capacity, and increases financial stress.”
“Strong early due diligence is less about avoiding every issue and more about protecting long-term portfolio growth and cash flow.”
Tran said it was essential for investors to do a basic condition assessment during an initial walkthrough, which can save significant time and money.
He said that buyers should assess the property's condition, including visible signs of moisture, rust, cracking, or general disrepair, which can often be identified without technical expertise.
“Look at the overall condition of the property and consider whether it would be costly to bring up to an acceptable standard.”
“If a property clearly requires extensive work before it is suitable as an investment, it may not warrant the cost of a formal inspection in the first place.”
If investing interstate and unable to inspect in person, Tran said it was critical to have a trusted team on the ground who could follow checklists and provide as much information as possible about the property.
Here’s what to look for before spending on a building and pest inspection:
1. Bathrooms and wet areas
According to Tran, before buying, investors should closely look at how well the property has been maintained, regardless of age.
He said he first checks grout and silicone seals, and if moisture readings are high, further tests like pressure or dye tests can confirm waterproofing failure.
“It often suggests the bathroom and, potentially, the wider property have not been well-maintained.”
He said that, while for older properties there is the possibility of future bathroom replacement, particularly if the condition is already poor, newly renovated bathrooms can raise equal levels of caution.
“If a bathroom has been renovated within the last 12 months, we want to see proper waterproofing certificates and warranties.”
“Renovations done purely for sale may not always prioritise quality.”
“In contrast, if the renovation is more than 12 months old and has been lived in, any waterproofing issues are more likely to have surfaced already, which reduces uncertainty.”
2. Cracking and damp walls
Similarly, Tran said that fine cracks near bathrooms or windows can hint at structural or water problems that won’t show in listing photos.
He said that for investors pursuing a renovation-focused strategy with a conservative budget, there may be room to negotiate and move forward despite potential issues.
However, for typical buy-and-hold investors with little tolerance for construction or value-add risk, these concerns often outweigh the opportunity, making walking away the safer choice.
“It ultimately comes down to whether the numbers still make sense.”
3. Gutters and eaves
According to Tran, other issues that aren’t visible in pictures include extensive rusting in gutters, deterioration of external elements, damage to roof tiles that allows water ingress, and more serious cracking.
“These issues can materially change the risk profile of a property.”
“These small details reveal a lot about moisture damage. Water issues here often mean hidden repair costs later.”
While damaged gutters or eaves might seem like minor maintenance issues at first, Tran said the real danger lies in the problems they can cause if ignored.
Poor drainage can lead to ongoing moisture exposure, resulting in timber decay, mould, structural damage, and repair costs that can quickly escalate far beyond the initial $2,000 to $5,000 estimate.
“From an investor’s perspective, we assess whether the issue is isolated and easily rectified, or whether it points to broader neglect.”
“That distinction determines whether it’s a manageable maintenance allowance or a red flag that affects long-term value and rental appeal.”
While some investors can inspect properties in person, others cannot, making it essential to have a trusted team around.
“Perhaps engage an independent building and pest inspector to carry out either a preliminary inspection or a full report to assess whether a property is even worth pursuing under contract.”
“Also follow a structured checklist, supported by detailed photos and video walkthroughs, to replicate as closely as possible the insight you would gain from being there in person.”
Additionally, Tran said that investors often overlook bedroom size, which can, in turn, impede rental returns.
“Bedrooms need to align with tenant demand in the area. As a general guide, we look for dimensions of around 3 metres on one side and at least 2.7 metres on the other to ensure functionality and market acceptance.”
Beyond the property itself, Tran said that suburb-level due diligence remains the first essential for investors, even before inspections.
He said that investors should check neighbouring properties, public housing concentration, proximity to main roads, and whether the home backs onto detractors, such as car parks or commercial sites, that could generate noise or reduce appeal.
“If it’s located near major detractors, in an undesirable pocket, or affected by high public housing concentration, there is a risk.”
“These are factors that cannot be changed once you own the asset,” Tran concluded.
