Buying a rental investment: electrical and heating checks before settlement

An owner-occupier asks whether they could live with the switchboard, the heater and the wiring. An investor needs a sharper question: what has to be fixed before the property can be legally advertised, and what will the new energy standards force over the next few years? A property that's fine to live in can still need real money spent before a renter moves in.

Since 25 November 2025, a Victorian rental must meet the minimum standards before it's advertised. If you're buying vacant, everything that falls short becomes your job before the first listing. If you're buying with a renter in place, a shortfall is a repair you inherit, and a property that doesn't meet the minimum standards is on the urgent repairs list.

Heating comes first. Every rental needs a fixed heater in good working order in the main living area, and for agreements from 29 March 2023 it must be energy efficient: a non-ducted air conditioner or heat pump rated 2 stars or above, a gas space heater rated 2 stars or above, a ducted or hydronic system with an outlet in the main living area, or a solid fuel appliance. An old gas wall heater with no readable rating label, or a living area added after the ducted heating went in, are common gaps.

Then the switchboard. Since 29 March 2023, power outlets and lighting circuits in a rental must be connected to both circuit breakers and safety switches. With panel-and-fuse or federal fuse boards, the electrician may have to replace the whole board and put circuit breaker protection on every circuit, including cooking, hot water and air conditioning.

Smoke alarms are cheaper but still count. Buildings constructed after 1 August 1997 must have hardwired alarms with battery backup, and every rental needs an annual smoke alarm check.

Consumer Affairs Victoria lists a change from 13 October 2026: rental providers and their agents must arrange gas and electrical safety checks every 2 years for all rental agreements, whenever they started. Ask the selling agent for the latest electrical and gas safety check records, the last smoke alarm check, and any outstanding recommendations.

Read the electrical record properly. It should include the electrician's name and licence or registration number, the date, the results including repairs needed and what was done, and a report under section 2 of AS/NZS 3019. A report with open items means work you'll be paying for, and the next renter has to be told about outstanding recommendations before signing.

From 1 March 2027, a rental's fixed heating that fails and can't be repaired must be replaced with energy-efficient fixed electric heating with an outlet in the main living area. A hot water system that permanently fails must be replaced with an energy-efficient electric one, and a failed gas system can't be replaced with gas. So an old gas heater and an old gas hot water unit are near-term costs, not just ageing appliances.

Cooling is triggered by the next agreement: from 1 March 2027, energy-efficient fixed cooling with an outlet in the main living area must be installed when a new agreement starts, and every rental needs cooling by 1 July 2030. Consumer Affairs Victoria's guide says one reverse-cycle air conditioner can meet both the heating and cooling standards. Ceiling insulation, shower heads and draughtproofing standards also apply at new agreements, so note what's in the roof.

Most of those upgrades add electric load: a reverse-cycle system, a heat pump water heater, perhaps an induction cooktop later. Check whether the board has space for new circuits and whether the supply suits what you'll add. Three-phase makes sense where several large loads are planned together, and it's cheaper to know that before settlement than after.

Age matters. Energy Safe Victoria says that when buying a home built before the 1980s, it's imperative to have the wiring checked by a licensed electrical inspector or registered electrical contractor. It also suggests owners of houses over 30 years old get their wiring checked. WorkSafe Victoria lists switchboards and their backing boards as a typical location for asbestos in buildings built or renovated before the late 1980s, which can affect the cost of replacing an old board.

Note the type of every gas heater. Energy Safe Victoria says open-flued gas heaters can spill carbon monoxide more easily than other types. From 1 July 2027, the rental draughtproofing standard needs a gas safety check before work starts in a property with gas appliances, and if that check finds unflued or open-flued appliances, the draughtproofing must not go ahead.

An old open-flued wall heater in a post-war brick veneer in Laverton or Altona North can therefore be a safety question, a heating standard question and a draughtproofing question at once. Factor its replacement into the numbers.

A pre-purchase electrical inspection covers the meter box and switchboard, safety switches, accessible points, switches and lights, smoke alarm types and dates, and roof space cabling where it's safe to reach. It can't see cable inside walls. Ask for the heater, hot water unit and any cooling to be noted too, because those drive the 2027 costs.

Book it early enough for the findings to matter. How you use them, whether in negotiation or as a contract condition, is a question for your conveyancer or lawyer.