Strict cap on short-term rentals delayed following criticism
Following widespread criticism from councils and online rental companies, the introduction of NSW’s planned holiday re...
BuildingPro founder Andrew Mackie-Smith returns to discuss potential red flags in pest and building inspections and the ways in which investors can tackle these issues head-on.
Tune in as he and host Phil Tarrant discuss the steps investors can take to identify, avoid and manage property concerns, as well as highlight the importance of asking questions and getting quotes to ensure they’re on the right track for investment success.
Tune in now to hear all of this and more, in this bonus episode of The Smart Property Investment Show!
If you liked this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: Facebook, Twitter and LinkedIn. If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!
Related articles of interest:
5 buying fails to avoid through a buyer’s agent
The difference between renovating for selling and renting
A five-point guide to building a multi-property portfolio
First home buyers returning as investors leave housing market
Phil Tarrant: G’day everyone, it's Phil Tarrant back here for a quick bonus episode. I've persuaded Andrew Mackie-Smith from BuildingPro to stick around the studio and I could pick his brain a little bit more on pest inspections up in Queensland. If you haven't listened to it yet, I've done a ... probably the longest podcast we've ever done for the Smart Property Investment show recently on building inspections and we touched on pest inspections and all the things that property investors need to think about when purchasing an investment property.
Andrew was nice enough to share a lot of his insights, so I'm stuffed that I'll be using now myself when I'm doing my own inspections of properties and it’s just really expanded my mindset and skill set, I guess, in terms of the power of being sensible in looking and assessing your property and taking the responsibility on yourself to actually understand how the bones of a building and what you should be looking out for, but I've got him in the studio, so Andrew's based up in sunny Queensland and you have a particular set of nasties up in Queensland and termites that like to eat wood and other type of pests up there.
We've got about five or six minutes, mate. You do building inspections with BuildingPro, which we just talked about, but pest inspections, which you also do. Why should you get a pest inspection?
Andrew Mackie-Smith: In areas where it's a designated termites zone, there's a risk of termite damage and termites aren't the only nasty. Some people get really focused on the T word, the termites, but often, fungal decay or better known as rot, people call it dry rot or wet rot, but rotting timber can be a major problem as well, too. That can be a very costly thing, especially with decks and timber houses, where you've got handrails and weatherboards and fences and things like that, it can be a lot of damage from rot as well, and that's also covered by pest inspection.
The other one is borers. Borers can do extensive damage in Queensland to floors as well. That's another reason, but basically, these little insects can do a heck of a lot of damage to properties and it can be very costly to rectify. It's pretty important to have an inspection done if it's a termite zone. If it's an area known for termites, have an inspection.
Phil Tarrant: Brisbane's pretty well known for termites.
Andrew Mackie-Smith: Oh, absolutely. Everywhere. Yeah. Even in the city.
Phil Tarrant: Which okay, so if you're an investor buying up in Brisbane or Queensland, you can expect there to be potentially some incidents where there might be termite damage to the building or an incident of there might be pests when you undertake an inspection. Is that a bad thing if they're there?
Andrew Mackie-Smith: Well, an experienced investor and shrewd negotiator, someone such as you Phil, would probably be able to turn that to your advantage. There's quite a lot of fear associated with termites, but in all reality, and from my experience, quite often the termite damage is only minor and can be repaired and treated for a small cost.
Now, there are occasions where the damage is very significant. It's thousands or you often will catch that show on A Current Affair and you'll see the whole house needs to be demolished, but fortunately, those occurrences are rare and usually the damage is at the minor end and can be rectified with some timber replacement and a termite barrier.
It's definitely not a reason to pull out of the contract straight away, it's a reason to get more information, ask more questions, perhaps get some quotes, and understand your costs and then you can make a good, informed decision.
Phil Tarrant: Okay. What's a termite barrier do?
Andrew Mackie-Smith: A termite barrier, there's a number of different ... The new word we've adopted is termite management system, and the -
Phil Tarrant: Okay. Sounds expensive.
Andrew Mackie-Smith: Well, a termite ... A common termite management systems is a chemical barrier, and that's still a gold standard and most reliable way, in my opinion, to protect a property and that's basically a treated zone of soil that's put around a property and if it's ... has a subfloor area, say if it's up on posts, it will also be to the subfloor area and the soil is treated.
Termites like to travel in the top layer of soil, so it might be the top hundred mills, typically. They will travel in that layer of soil and so that treated soil will either repel the termites, will kill them on contact, or they will ingest some of the poison and take it back to the nest and then that's fed to the queen and then she'll be poisoned and stop producing eggs, and that's colony control and will actually wipe out the whole termite nest. They work in different ways, depending on how the chemical's formulated.
The other two main types of termite protection or management systems are physical barriers, things where the barriers are built into the walls, typically in and around pipes, and the other system is those little monitoring bait stations where they have a plastic tube or box in the ground, which has bait put inside of it, so they're the three main ways of managing your termite risk.
Phil Tarrant: Is there anywhere where termites particularly like to hang out? If you're looking at buying an investment property, is there anything you should really look out for, like fallen over tree stumps or wooden fences or this sort of thing?
Andrew Mackie-Smith: Oh, yeah. Previously we talked about what to look out for. I mean, when you pull up to a property, if it's next to or backs onto a bush reserve, wow, that's a lot of termite pressure. If you can see a lot of trees on the property or you're, again, you're next to a park or something, that's a high risk.
If there's a lot of timber logs on untreated timber like those old railway sleepers, termites just love that. That's food for them. Termites will typically need rotting timber, is what they're really attracted to, and rotting timber and dampness. If you have a poorly drained site and you have a lot of rotting timber in the ground, like tree stumps or logs, untreated retaining walls, untreated landscaping timbers, that will attract a lot of termites to the property and if you have leaking downpipes and things, again, all that dampness will create the right conditions. That's what you've gotta watch out for.
Phil Tarrant: I guess, as a property investor and ... I have properties up in Queensland, in Brisbane, good management, so should you be helping your tenant to ensure that your properties well maintained so there isn't tree logs etc. hanging around? What about like ... What else can you do in order of good maintenance to try and stop termites coming in?
Andrew Mackie-Smith: Yeah, that's a great question. If you can reduce the risks on the property for termites, you go a long way towards preventing them, even without the use of any chemicals or treatment systems. I've inspected plenty of houses that have been up for 50, 80 years or more, they've got no termite damage whatsoever, and that's because they have reduced the risks.
Again, have all your gutters and downpipes all connected the storm water systems, so the ground stays dry. There's no stagnant water and the site is well drained. You're not having damp conditions. That's number one. Number two would be, again, remove the logs, the tree stumps, the untreated timber from around the property and if you can do those things and fix any leaks promptly, so if you had any plumbing leaks, repair those promptly.
If you're doing those things and, of course as well, have a once a year inspection is always worthwhile.
Phil Tarrant: Once a year-
Andrew Mackie-Smith: Once a year-
Phil Tarrant: ...inspection.
Andrew Mackie-Smith: Yeah, professional timber pest inspection. If you do just those things, you're a long way down the track to -
Phil Tarrant: Prevention or -
Andrew Mackie-Smith: Yeah, absolutely. Reduce those risks. Once your inspection ... and if you want to be totally protected, get the termite management system in place.
Phil Tarrant: What would an average inspection cost once a year for like a pest inspection?
Andrew Mackie-Smith: Oh, anything from maybe ... Typically, about $200 - $300 plus GST.
Phil Tarrant: So it's not a -
Andrew Mackie-Smith: For an annual inspection.
Phil Tarrant: …a huge amount for if you gotta fix some timber damage, it's gonna cost you that much and you've got it get it painted in time and hassle the tenants and all this sort of stuff.
Andrew Mackie-Smith: For a property investor, it's all a tax deductible expense, and I think it genuinely is worthwhile, so yeah, do get that done and if that inspection report recommends, like we've said, removing a tree stump or replacing some rotten timber or something or fixing a leak, do those things, 'cause they're the things that'll attract termites in the future.
Taking actions on those reports is what's necessary, 'cause so many times, I've read inspection reports where they've recommended those risks that we've discussed to be mitigated, and no action was taken and then I come in to do a pre-purchase inspection, and bingo, termites have come in in that very spot because of that risk.
Phil Tarrant: Can you walk up at house and just look at it and go, "Yeah, there's gonna be termites here"?
Andrew Mackie-Smith: Yes-
Phil Tarrant: You've got that feeling?
Andrew Mackie-Smith: You do get a bit of a sense for ... You won't always be right, but you can certainly get a sense for where you see the risky ones.
Phil Tarrant: Your left foot doesn't start itching or that?
Andrew Mackie-Smith: I'm not that well-oiled gifted, but I can tell you that you do get a sense, and again, it comes back to dampness. Termites really need damp and they need timber in contact with the ground, and once the timber ... Termites actually have quite soft teeth. They're teeth have probably the consistency of our fingernails, so they're not really sharp teeth, so for them to chew through the timber, if it's decaying or if it's moist, they can chew it much readily-
Phil Tarrant: Okay, that makes a lot of sense. That's the reason why you don't want water around, because it sort of makes them moist, so it's easier to eat and therefore, it's going to attract-
Andrew Mackie-Smith: That's right.
Phil Tarrant: That's the science.
Andrew Mackie-Smith: There, that's the science behind it and that's why the hardwood timber is just trickier for them to eat. It's just denser timber and they like the soft woods, so that's why, typically, termite damage will show up on the skirting boards and architraves, they're made of pine, they're softer, but if there's any dampness around, that gives them a water source. Being like most creatures, they need water to survive and they'll come towards the moisture and then they've got the moisture and then they've got the timber that's palatable and you get the termites in.
Phil Tarrant: Anything else to finish up with, with pests in Brisbane for property investors? I think we've covered a fair bit off.
Andrew Mackie-Smith: We have. One more thing we touched on briefly earlier, is if you have a house that has significant borers, damage to floor boards, just watch out for-
Phil Tarrant: What's a borer? Borer's like worm, is that pretty much what a borer is?
Andrew Mackie-Smith: Pretty much. Borer's like a little insect. It's a winged insect. It flies, lays an egg, drills a hole into the timber. Usually when it's found in the forest, they'll drill a hole, drop in an egg, that larvae will then hatch, burrow through the timber and then sort of honeycombs the timber and really reduces the strength of the timber. And what you'll see is little pinhead sized black holes in the timber, typically in these older Queenslanders, you'll see these holes being dotted throughout the floorboards, especially if they're hoop pine floorboards, which is that honey, whiter coloured board and that damage weakens the boards, so your tenants can ... If they were to put a load there, like a heavy bed, pair of furniture or stomp on the floor, they could go through the floorboard.
If you've got minor damage to a few boards, not a big issue, quite common, but if you've got extensive damage through the floors, you could be up for all new floors, so that's something to watch out for.
Phil Tarrant: Okay, mate. Again mate, you're a wealth of knowledge and there's so many things to look out for as a property investor. It scares me a bit. It's just the price to play, isn't it. Peace of mind is an important thing.
Andrew Mackie-Smith: Yeah, just get an inspection and get a good inspector on your team and you'll be all right.
Phil Tarrant: Good summary. Thanks, Andrew.
Andrew Mackie-Smith: Thanks, mate.
Phil Tarrant: That's good, mate. Remember to check out SmartPropertyInvestment.com.au. Just a quick bonus episode. Make sure you go back to listen to the long chat I had with Andrew from BuildingPro. It was probably only four days before this podcast has come out, so it's jam-packed and we covered 10 different things that you definitely must be thinking about when looking at building inspections, so remember to check us out on social media, SmartPropertyInvestment.com.au. I'll see you again next time. Bye-bye.
Disclaimer: The information featured in this podcast is general in nature and does not take into consideration your financial situation or individual needs and should not be relied upon. Before making any investment, insurance, tax, property or financial planning decision, you should consult a licenced professional who can advise whether your decision is appropriate for you. Guests appearing on this podcast may have a commercial relationship with the companies mentioned.