The Due Diligence Checklist We Run on Every Single Property (And You Should Too)

Eight hours.

That's how long our team spends on due diligence for a single property before we recommend it to a client. Eight hours of pulling documents, checking overlays, driving past at different times of day, running the numbers, and looking for the things that don't show up in listing photos.

Most buyers spend less than eight minutes reading the agent's description on Domain.

I get it — due diligence isn't exciting. Nobody posts Instagram stories about reading a Section 32. But I'll tell you what's even less exciting: discovering six months after settlement that your property sits on a flood zone, has an easement that prevents any future development, and the 'renovated bathroom' was done without a permit.

Every one of those has happened to a client who came to us after buying without proper checks. Every one cost them $20,000 to $80,000 to resolve.

Here's the full checklist we run. Every time. No exceptions.

Step 1: The Section 32 — read it or regret it

The Section 32, or Vendor's Statement, is the single most important document in any Victorian property transaction 1. It's a legal disclosure document that the vendor must provide before you sign a contract.

What we check:

• Title search: Is the title clean? Are there any caveats, covenants, or restrictions? A single dwelling covenant will prevent you from ever building a granny flat or subdividing [2].
• Zoning: Is it General Residential Zone (GRZ — best for investors) or Neighbourhood Residential Zone (NRZ — limits what you can build)? Is there a Heritage Overlay restricting modifications?
• Easements: Where do they run? An easement through the centre of the block kills subdivision potential. An easement along the boundary is usually manageable [3].
• Planning overlays: SBO (flood), BMO (bushfire), PAO (government acquisition). Any of these is a potential hard veto.
• Outgoings: What are the current council rates, water rates, and owners corporation fees (if applicable)?
• Building permits: Has any work been done that required a permit? Was the permit obtained? Is there an occupancy certificate for any additions?

The S32 review alone takes our team 60 to 90 minutes per property. If anything looks wrong, we stop here. No point inspecting a house with a title problem.

Step 2: The Google Earth time machine

This is my favourite trick, and it's completely free.

Google Earth Pro has a historical imagery slider that lets you view satellite photos of any property going back 10 to 20 years 4. We use it to check:

• Has the block been subdivided? If the current lot was part of a larger block five years ago, the remaining land might be oddly shaped or have access issues.
• Has the house been extended? If the building footprint is significantly different from older photos, there should be a corresponding building permit. If there isn't, that's an unpermitted structure.
• What's changed around the property? A new industrial development 200 metres away. A cleared lot that's now a construction site. A tree that's been removed (potentially triggering council vegetation rules).
• Drainage and flooding: After heavy rain events, Google Earth sometimes captures temporary ponding or waterlogging. If you can see standing water in historical photos near the property, that's a flood risk indicator [5].

This check takes fifteen minutes and has saved us from at least a dozen bad purchases.

Step 3: Drive past at 7pm on a Tuesday

Listing photos are taken at 10am on a sunny Saturday with a wide-angle lens that makes every room look 30% bigger than it is.

Reality lives at 7pm on a Tuesday.

We drive past every property at least twice — once during the day, once in the evening on a weekday. Here's what you learn:

• Street parking: Is the street full of cars at night? That suggests higher density living, possibly illegal boarding houses nearby.
• Noise: Can you hear the freeway? The train line? The neighbour's dog? These don't show up in photos.
• Neighbours: What's the general condition of surrounding properties? A well-maintained street signals owner-occupier pride. Overgrown lawns and rubbish bins left out all week signal rental-dominant streets [6].
• Lighting and safety: Is the street well-lit? Are there dark alleys or vacant lots adjacent? Tenants notice these things.

I know one investor who bought a property in what seemed like a quiet residential street. Turned out it was the overflow parking for a nearby football club. Every Saturday from April to September, his tenants couldn't park within 200 metres of the house.

Step 4: Building and pest — never skip this, never

I've said this before and I'll keep saying it until every investor listens: never waive the building and pest inspection. Not even on unconditional offers — we conduct the inspection before making the offer 7.

A building and pest inspection costs $400 to $600. It takes 2 to 3 hours on site.

What a good inspector checks:

• Structural integrity: Cracks in walls, uneven floors, sagging roof lines, evidence of subsidence
• Moisture and damp: Rising damp, inadequate sub-floor ventilation, shower waterproofing failures
• Termites: Active infestations, previous treatment evidence, conducive conditions (timber stored against the house, garden beds touching the brickwork)
• Electrical safety: Switchboard condition, presence of safety switches, wiring age
• Roof condition: Tile/tin condition, guttering, downpipes, flashing around penetrations
• Plumbing: Water pressure, drainage, hot water system age and condition

In 2021, our inspections caught three properties with active termite infestations ($30,000+ to treat and repair), two with illegal structural modifications ($15,000+ to rectify or demolish), and one built over a disused mine shaft 8. That last one didn't show up in any council records.

The $500 inspection is the single best insurance policy in property investment.

Step 5: The cash flow stress test

Before we make an offer, we run the numbers through three scenarios 9:

Base case: Current interest rates, realistic rent based on comparable properties (not the agent's optimistic estimate), actual insurance and rates costs.

Stress test: Interest rates increase by 2%. Rent drops by 10%. One month vacancy per year. Can the client still hold the property without financial distress?

Best case: Rates drop 1%. Rent increases after renovation. Granny flat or dual occupancy income added. What's the maximum yield achievable?

If the stress test shows the client needs to subsidise the property by more than $200 per week from their salary, we don't proceed. The margin of safety isn't there.

Due diligence isn't glamorous. It's not the fun part of property investing. But it's the part that determines whether you make money or lose sleep.

Eight hours. Every property. No shortcuts.