Every investor knows the importance of due diligence when it comes to real estate property. But does this mean you’ll need to perform an oil tank scan on your next investment property?
These sorts of maintenance tasks can add up and cut into your bottom line. On the other hand, neglecting these essentials can result in bigger problems down the road.
If you’re not familiar with an oil tank scan, we’ll help you understand this process and whether you should include an oil tank scan as a part of your regular investment strategy.
What Is an Oil Tank Scan?
In the middle of the twentieth century, American homes made the transition from using coal as a source of heating fuel to using oil. While oil burners had made considerable advancements in the 1930s, oil had not become dominant until roughly the 1950s and lasted until the rise of natural gas in the 1980s.
This widespread use means that if you’ve purchased a home built between the years of 1900 and 1980, there’s a good chance that oil was used as a source of fuel during its lifetime.
Even if the home transitioned to another heat source since then, it wouldn’t be unusual if the oil tank remained buried somewhere on the property since construction codes didn’t demand their removal until the 1990s. Unless the previous owner(s) deliberately addressed this situation, the oil tank could remain buried to this day.
A tank scan is a method of locating these underground tanks. Sometimes they can be identified by signs on the surface, though in other cases, an oil tank sweep requires the use of Ground Penetrating Radar (GPR) or electronic imaging.
Signs of a Leaking Oil Tank
When an underground oil tank leaks, it cannot be repaired, only unearthed and addressed. You may be looking at an underground oil tank if you notice any of the following signs or symptoms:
- Lack of vegetation in a particular area
- Drinking water contaminants
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The presence of oil in storm drains
- An oily smell in certain parts of the property
The absence of these factors doesn’t rule out the possibility of an underground oil tank. Unfortunately, the only way to know with confidence is to have an environmental contractor perform an oil tank scan.
Can I Just Leave the Oil Tank Where It Is?
The answer is typically “yes,” especially for homes built prior to 1980. Here are just some of the reasons why you should perform an oil tank scan on your investment property:
Oil Tank Scans Are Required by Your Financial Institution
Some banks and mortgage lenders will require an oil tank scan prior to approving a loan for the property. Additionally, some real estate agents will require you to perform an oil tank scan before they’re willing to work with you in selling the property. You may simply be obligated to perform a scan before proceeding with your investment.
Leaking Oil Tanks Damage the Environment
A leaking oil tank can spell danger for the surrounding soil and nearby water supply. Leaks can also contaminate neighboring soil. Unfortunately, this means that in addition to disposing of the tank, you’ll also be responsible for clearing away any contaminated soil, which can often be the biggest cost.
Oil Tanks Pose Health and Safety Concerns
How Much Does It Cost to Remove an Oil Tank?
Bottom Line: Why You Need to Do an Oil Tank Scan
Strategy Is the Key to Success
