Should I buy a property with termites?

[Leonard Brown]

Hi BP, I’ve gotten several calls from clients on this topic over the past few months and thought I’d touch on it here. Here’s a Thursday tidbit for the community.

When it comes to termites and investment properties, does it make for a good deal, bad deal, or no deal at all?

Whether or not you purchase an investment property with existing termite damage and/or active termites all depends on your investment strategy. Termites can cause a substantial amount of damage but they aren’t difficult to remediate. What’s important is evaluating if the damage is structural, and if the termites are an indication of an even bigger issue.

Subterranean Termites live underground and often go undetected for extended periods of time. I recently inspected a home where the owner had been experiencing a small roof leak for quite some time. Over time this leak lead to mold in the drywall and wood rot in the studs, which created a conducive condition for termites to make an appearance. This is more common than most people would think. Some of the tells are sagging or bouncing floors, bubbling paint, the smell of mold or mildew, pinholes in the drywall, and the most obvious is mud tubes. Some not so obvious causes for termite that should signal taking a closer look for termites is any wood to ground contact (pressure treated lumber is not safe from the threat of termites if installed directly in the ground), foliage, siding less than 6 inches from grade,

high dirt, and subtle wood piles up against the house.

The point is, if you’re considering purchasing a home with active termite damage, you are in a position of power. Finding activity or damage during your due diligence period can assist with negotiate the price down or get a seller concession. Again, it all depends on your investment strategy and the extent of the damage. And detecting their presence is less surprising when you have an idea of what to look out for.

Pro tip: Termite inspections from a pest control company are typically free (and you’ll have an idea of what treatment will cost).

How have you handled termites/termite damage when buying properties? Is this a deal breaker?