Do You Always Inspect / Treat for Termites

[Chris Bounds]

Distressed house buyers, especially in southern regions like Houston - Do you always inspect and/or treat for termites when rehabbing a flip or rental property?

Obviously, if there are signs of termite damage it's a no-brainer.  I'm more wondering if it's done as a general rule since distressed properties have a higher chance of active termites due to neglect.  Or, if there are no signs do you chance it and wait until a problem comes up (buyers inspection, tenant complaints).

[Matt R.]

From experience with a house in Tulsa, Oklahoma and one in the Kansas City, Missouri area, the lenders required a termite inspection in both places.

These were both houses that I lived in, not ones I was going to flip or rent out.  The Tulsa house was being sold in good condition, while the KC house was bank-owned and known to need work.  Both times, the guy that did the "general" house inspection also did the termite inspection.  I'm pretty sure that in both cases, if I wanted just the termite inspection for some reason, I could have paid a lower fee and gotten that.

Keep in mind that I'm very new to this, but my thinking goes as follows: If you know the house needs (say) $50K of rehab otherwise, and you have to open up enough of the walls or floors that you'll probably see any damage that is already there, then skipping the inspection and maybe having to spend another $2K on treatment if you find damage is probably not such a big deal.  If the house only needs $5K of rehab otherwise, and you won't be looking at very many places inside the walls or floors, it might be worth getting the inspection, as an extra $2K is a large addition to the rehab budget.

Another piece of the puzzle is that it's easier to do the treatment when the house is being worked on anyway.  They may have to remove flooring in the basement to drill holes, etc, and it's noisy and a little dusty.  If the house is vacant, the termite guy can do his thing at any time without annoying the tenants.  If there are tenants, you may have to ask them to move furniture/stuff, maybe find a time when they aren't home so the noise doesn't bother them, etc.