Investing in real estate can be a wise financial move. It can provide a passive income stream if you have tenants or it can lead to a large payoff if you sell the property at a higher price down the road. Unfortunately, the potential for big gains also comes with the potential for big losses if you do not take the proper precautions prior to making such a big investment. Consult with the trusted real estate attorneys at M&A Law Firm, P.C. and make sure you are making a wise real estate investment that will help, not hurt, your financial situation.
What Do I Need to Know Prior to Investing in Real Estate?
One of the best things you can do prior to purchasing real estate investment property is to find out as much as you can about the property you intend to buy. Know things like:
- The history of the property: Be familiar with how much the property has been bought and sold for in the past. Know what type of businesses may have been on the property and what they were used for. Some businesses may have left things like chemical waste behind. This is costly to remove and clean up. M&A Law Firm helps its investor client’s mitigate this risk by helping navigate Buyer’s through the Phase 1 & 2 environmental inspection process as appropriate.
- The zoning laws and restrictions on the lot: If you want the property to be used for a particular purpose, make sure that it would be a permissible use under local zoning laws. Also, investigate whether these local laws will be changing any time soon. Often times, this due diligence can be performed within a designated time after entering a commercial contract, known as the due diligence period.
- What type of repairs, if any, the property needs: Minor repairs might not be a big deal, but major structural repairs, such as needing a new roof, can be very expensive.
- What’s happening with the area surrounding the property: Get to know the neighborhood. Is it a good neighborhood? An up and coming neighborhood? How is the area growing and changing? What is the crime rate like and has it been improving over the years Are there any major building projects planned nearby? All of these can have major impacts on the future value of the property you want to purchase.
- What type of liability are you opening yourself up to as a property owner? Property owners put themselves at risk of liability for injuries that may occur on their property. When you are owning investment property, you generally will not be on the property frequently enough to make the requisite inspections of the property to make sure it is free from hazards. Evaluate your potential for things like future premises liability claims being made against you as property owner.
- Know the costs associated with owning the property: What type of repairs will you need to make? What will maintenance cost? Will you need to pay a property manager?
- Know the tax history of the property. Many Buyers do not realize that unless you file a tax appeal, there is a strong probability that you will be overpaying taxes on the property. This is especially true in Cook County, but also increasing the case in surrounding counties. M&A Law Firm, P.C. offers all of its investors a complimentary tax reduction analysis.
Real Estate Attorneys Helping You Make Wise Investment Choices
At M&A Law Firm, P.C. we want to see our clients succeed in their real estate investment ventures. We can walk you through the entire investment property procedure and evaluate what type of risks and costs may be associated with owning investment property. Call M&A Law Firm, P.C. today.