Screening Potential Tenants Can Protect Your Real Estate Business from Financial Loss

Illinois real estate attorneysWhen renting out property – be it commercial or residential – landlords are encouraged to conduct a thorough screening of all prospective tenants. The reasoning for this is simple: tenants can cost you thousands of dollars in property damage, lost rental fees, and court costs. Learn more about how to ensure you have done your due diligence on a potential tenant for your property, and discover how a seasoned real estate attorney can help protect your real estate business.

The Pre-Screening Process

There are many ways to conduct a tenant screening, but most landlords find a two-step process preferable, which starts with a pre-screening, and it typically includes questions like:

  • Why are you moving?
  • Can you meet the income requirements?
  • Do you have pets?
  • When do you want to move in?
  • Will anyone else be living/doing business with you?
  • Are you willing to undergo a background and credit check?
  • Can you provide me with past rental references?

With these few questions, landlords are often able to filter out tenants who might be problematic. Some may even remove themselves from the pool of tenants because they are uncomfortable with the questions or cannot answer them satisfactorily. At the very least, these questions allow the landlord to focus their efforts on the tenants who seem to be the “best fit” for their property or situation.

Digging Deeper Into a Prospective Tenant’s Rental History

Although it may be possible to screen out problematic tenants with the pre-screening questions, one should never rely solely on this phase of the screening process. There are “professional tenants” that know how to difficult it can be to evict someone. Able to make themselves sound like model tenants, these seemingly charming and charismatic people often have a slew of evictions on their record. Alternatively, they may not have active employment and may, instead, offer you invalid employer information to get themselves into your property. Avoid such issues by ensuring you always conduct a criminal background check, credit check, and a rental history check. Also, always verify employment and call a prospective tenant’s references before moving forward with a lease.

Adding Another Layer of Protection to Your Real Estate Business

Although many landlords choose to handle tenant matters on their own, savvy business owners recognize that it is often best to delegate some of your more taxing or complex duties, such as screening tenants or fighting a problematic tenant in court. It is here where the aid and assistance of a seasoned real estate attorney can become valuable.

With over 40 years of experience, Stock, Carlson, Oldfield & McGrath, LLC can add yet another layer of protection to your real estate business. Able to assist you in developing a clear and concise rental agreement, and capable of aggressively representing you in court if a tenant defaults, our DuPage County real estate lawyers make your financial future our top priority. Learn more about how we can assist you in growing and protecting your portfolio by scheduling a personalized consultation. Call 630-655-2500 today.

Source:

https://www.forbes.com/sites/forbesrealestatecouncil/2018/03/08/how-to-screen-potential-tenants-and-save-thousands/#7adb48b0332c

Purchasing Investment Property – Five Considerations to Make Before You Buy

DuPage County real estate lawyersInvesting in real estate can be a lucrative move for the financially savvy, but for those that fail to do their homework, there is a risk of severe financial loss. Learn how you can be a part of the former group of investors, rather than the latter, by avoiding some of the most common real estate investment pitfalls. You shall also discover how an experienced attorney can help reduce the risk of complications in your next real estate transaction.

How Much Will It Cost? 

Calculating the cost of a property can get a little complex, especially for the novice investor. That is because there is more to cost than the sale price, closing costs, and title fees. There could be zoning problems that need to be corrected before you can rent or sell the property, and distressed properties, which are common in the real estate investment sector, could have more damage than you initially thought. As such, investors are encouraged to perform their due diligence before purchasing an investment property, especially if it needs repairs.

How Will Location Impact Your ROI?

Location is everything, especially when it comes to investment property. Prime locations will typically cost more, but they tend to have a higher return-on-investment (ROI). In contrast, properties that are in sub-prime locations are more affordable, but they may have a lower ROI. Areas that are up-and-coming may have a lower ROI to start with, but they may provide you with long-term gains. You could also find yourself dealing with a property that is located in a distressed or declining area, and that might require you to loosen your renting requirements to obtain any sort of gain. In other words, choose your location wisely and always consider how the location could impact your ROI, both immediately and in the long-run.

Who Will Manage Your Property? 

While some investors make great property managers, others lack the skills or temperament to deal with tenants and their potential issues. For example, an investor may have a great deal of compassion, so they may be willing to rent to a tenant based on circumstance, rather than their ability to pay. Sadly, this can place the investor at a serious risk for financial loss – and possibly even financial devastation if they manage several properties in the very same manner. If you fear you cannot manage your property effectively, or you would simply like to ensure you have more time to focus on your portfolio, you may want to consider hiring a property management company instead of handling everything on your own.

Are You Following the "Rules" of Investment?

Investment gurus have one hard and fast rule: never invest in a property that cannot make at least one percent of its cost in the course of a month. In short, if a home is costing you $250,000 to purchase and prepare for tenants, you need to be able to rent it out for at least $2,500 each month. If you cannot make this, or if the pricing is unreasonable for the area, it may be best to find another property. There are exceptions, of course, but investors are discouraged from making them without the guidance and advice of a seasoned professional.

Have You Accounted for the Unexpected?

Seasoned investors know that upfront expenses, such as repairs and closing costs, are sometimes just the beginning. There may be other unexpected expenses, such as taxes and insurance as well. Plan for them and you will be more likely to experience a hefty return on your investment, but fail to do so and you could lose a substantial amount on your next transaction.

Contact Our Skilled Wheaton Real Estate Attorneys 

When you need protection in an investment transaction, Stock, Carlson, Oldfield & McGrath, LLC is the firm to call. Dedicated and experienced, our Wheaton real estate attorneys can assist you in performing your due diligence, and we can help ensure you have not missed any pertinent details. Schedule your personalized consultation to get started. Call 630-665-2500 today.

Source:

https://www.forbes.com/sites/forbesrealestatecouncil/2017/09/11/seven-things-to-consider-when-buying-an-investment-rental-property/#6f46d3b46dad

Why Hire an Attorney When Buying or Selling Residential Property?

Illinois real estate lawyersAs a consumer, you make hundreds – if not thousands – of purchases each year. Some are small and require nothing more than your debit card, credit card, or cash payment. Others, such as the purchase and sale of residential property, require a larger investment. Learn how the aid of an experienced real estate attorney can protect that investment while also decreasing the chances of costly or unexpected delays and challenges along the way.

Practicing Your Due Diligence

Anyone that has ever purchased a used car knows that there is always a risk of purchasing a "lemon" – a vehicle that never seems to run properly and always needs repairs. Sadly, not everyone knows that this can happen with houses, too. A home with the gorgeous wainscoting could be hiding mold or fire damage underneath. Structures that do not give much access to the crawl space could have more foundation issues than originally thought. Due diligence, performed with the aid of an attorney, can reduce the risk of these costly and unexpected problems.

Avoid Vague and Unclear Contract Terms

Real estate contracts are long, complex, and potentially confusing documents that few individuals have the knowledge to decipher. Instead, they usually find out too late that they are responsible for more of the closing costs than anticipated, or that the real estate agent has added commission fees to the contract. Avoid such issues by ensuring you have an experienced real estate attorney on your side, long before you ever sign a single document.

Negotiate a Better Deal in the Purchase Agreement

The purchase agreement is one of the single most important documents in a residential real estate transaction, and not understanding it can cost you dearly. For example, it may be listed that the home was altered, but it may not have been done lawfully. If you do not know this before signing the purchase agreement, you could become subject to fees and fines, imposed by your county, city, or state, for the continued use of unlawfully built or zoned structures. Additionally, you would be responsible for the demolition or correction of the structure in question.

Contact Our DuPage County Real Estate Lawyers

Regardless of whether you are purchasing or selling residential real estate, contact Stock, Carlson, Oldfield & McGrath, LLC. Dedicated and experienced, our seasoned DuPage County real estate lawyers can protect your real estate investment. Call 630-665-2500 and schedule your personalized consultation to get started today.

Source:

https://www.investopedia.com/articles/mortgages-real-estate/08/real-estate-attorney.asp