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

Cybercrimes in the Real Estate Market – What Homebuyers Should Know

Illinois real estate attorneysCybercrimes may not be a new issue, but they have become more prominent over the past few years. In fact, you may have even heard about some of the biggest breaches, such as those that happened to Equifax and Yahoo. What you may not know is that these crimes are found in almost every industry, including the real estate industry, and changing your passwords, freezing your credit report, and upgrading your computer security may not save you. Learn what homebuyers are up against and discover how you can protect yourself during the closing transaction on your new home purchase.

Beware of Real Estate Closing Transaction Scams

Over the past year, hackers have intercepted more than $1 billion in real estate transaction money. Mostly, they target large transactions, but even smaller ones can be at risk. Two recent cases – one last May, in which a couple lost $1.57 million on a wire transfer of their settlement funds and one in January, in which a Denver couple lost $272,536 of their down payment – are prime examples of just how varied the targeted transactions can be.

Hackers start the process by finding an opening in the system or email account of a title company or real estate agent. They then track upcoming home purchases to determine which ones are scheduled for payment. Once they find a victim, they send an email, posing as the escrow agent or title company, and instruct the home buyer to wire funds to an account. The homebuyer assumes it is the escrow account, but it is not. Instead, it is a bank account owned by the criminal. Once the funds are in their account, they withdraw the money and disappear.

Protecting Yourself from Real Estate Transaction Scams

Homebuyers can protect themselves from real estate transaction scams by ensuring they verify all emails in which funds are requested. Contact the individual that sent it, either in person or over the phone, before wiring any money. An experienced real estate attorney can also provide protection by handling all the legal aspects of your home purchase transaction.

At Stock, Carlson, Oldfield & McGrath, LLC, we protect your interests during residential real estate transactions. Dedicated and experienced, we can review contracts, negotiate better deals, and even help protect you from hackers. Learn more about how our seasoned DuPage County real estate attorneys can assist with the purchase of your new home. Call 630-665-2500 to schedule your personalized consultation with us today.

Source:

http://www.miamiherald.com/news/business/real-estate-news/article181726486.html