Ordering a survey for a new flip or rental can seem like overkill. It is not a legal requirement for
acquisition of an investment property, and if a lender is involved many of them are satisfied with title
insurance. Although it may seem like an extra expense and unnecessary delay, it is actually a vital
component within the due diligence process. Outlined below are three important reasons to consider
ordering a survey on every real estate investment transaction.
Boundary Surveys Help Easily Identify Encroachments
The primary reason to have a survey completed is to ensure all encroachments or easements are clearly
identified. Encroachments exist when an owner violates the property rights of its neighbor by building
on or extending a structure over the neighbor’s land or property. An example would be a neighbor’s
fence, wall or even a building on the property that can lead to a dispute. An easement is a legal right to
use another’s land for a specific, limited purpose. Common examples are easements for public utility or
power lines, but another example that would be problematic for an investor could include driveway
access. The investor buying the home may not have full access to their property via the driveway
because it is shared. A survey would highlight this potential issue. Not understanding how
encroachments and easements are impacting an investment property can affect an investor’s ability to
resale or refinance the property, which will ultimately cost time and money.
A Must if You’re Planning to Renovate
Next, a survey will show all improvements and the drawing will provide pertinent measurement details
pertaining to the location of those items. Many investors choose to add bedrooms, garages, fences, or
other additions when renovating a property. A survey will not only ensure any additions are within
boundary lines, but it can also be used to obtain permits when needed.
Boundary Surveys Provide Due Diligence For Smart Investing
There is no opportunity to reverse the result if you neglect proper due diligence. Sellers and
even some private lenders often push to close deals quickly and avoid ordering a survey. This is a major
red flag and an indication that the sale is more important than the investor’s success. Do not be bullied
and make sure you are taking the time to evaluate every deal in a thorough manner.
A survey is a critical tool that should be utilized in any real estate investment transaction. The survey
identifies encroachments and easements, determines the location of boundaries and improvements on
the property, and allows an investor to complete proper due diligence. Wise investors understand that
a little extra time and expense on the front end can prevent future catastrophes. Prior to closing on
your next deal make sure you order a survey to protect your investment and avoid potential pitfalls.
Have you found the ideal property for investing? Once you’ve done your due diligence, let the team at Longhorn Investments help you finance your flip with a hard money loan! Contact us today!