Being a landlord comes with plenty of responsibility. You’ve no doubt heard some horror stories about the massive problems that come with being a landlord. Here are a few examples of worst-case scenarios that you’ll hopefully never have to go through.
3. Zoning Issues
This is a problem found commonly amongst landlords buying new properties without doing a proper check for zoning permits. Some people have bought multi-unit buildings and are then notified later on by the city that the last owner didn’t bother securing the required paperwork to properly convert it from a single-family dwelling. Cases like these are accompanied by heavy fees and some are even forced to remodel the building back into a single-family home.
Needless to say, this can ruin somebody financially; especially those who were relying on renting out the property to multiple tenants to cover the mortgage payments.
Other zoning issues include rezoning which can eat up a lot of your time and effort and can adversely affect your property. The city may want to change the zoning ordinance within your property area to make some changes around the neighborhood.
2. Terrible Tenants
Awful tenants comprise most of the landlord horror stories that are passed around. The rights of a tenant vary per state and a number of people exploit certain laws for personal gain. While most state’s do provide fair laws that let’s landlords evict irresponsible tenants, the worst kinds of tenants will fight tooth and nail making it difficult for all parties involved by going to court and going through a lengthy procedure to prove that they’re the ones being abused. Remember to screen your tenants personally and once you are satisfied, be sure to treat them well.
1. Deflated Value
We still feel the effects of the recent real estate bubble that lead to countless property foreclosures in the last few years. The worst hit neighborhoods aren’t hard to spot as they are usually filled with dark abandoned buildings, occupied by squatters and shady people. There are a lot of vacant homes getting worse over time due to lack of maintenance dragging down the value of all the houses nearby.
A scary side-effect of these abandoned neighborhoods is a high crime rate which further lowered the already deflated value of homes. The best way to avoid this would be to buy properties in established locations or is nearby good schools or business districts.
Another side-effect of this bubble was the hit to the economy. Real restate and property development stocks plummeted and many building and development companies were forced to file for bankruptcy and invest millions in attorney filing and other legal fees.
Dealing with real estate always entails a lot of risk but all these problems can be avoided if you handle your finances with extreme caution and examine all the risks involved. Real estate lawyers are very helpful in screening out a number of these aforementioned issues ensuring a clean, problem-free purchase. They may cost some money, but its money well spent and it is definitely a lot cheaper than having to call them once you are dealing with a problem that could have been avoided by consulting a real estate lawyer in the first place. Prevention is always better (and more cost-efficient) than the cure.