Investing in real estate can be lucrative, but as with any major financial endeavor, it can also be risky. Whether you manage residential apartments or lease commercial spaces to small businesses, it is essential to protect yourself during every transaction. Although the basic proceedings for purchasing property are always the same, different kinds of hurdles and disputes can arise along the way. Below, the seasoned legal team at Zangari Cohn Cuthbertson Duhl & Grello P.C. in New Haven, CT, discusses some of the most common mistakes real estate investors make, so you can mitigate any issues.
3 Mistakes to Avoid When Purchasing Real Estate
When real estate investors fail to advocate for their rights regarding the seller’s disclosure requirements, the financial repercussions can be devastating. Although state laws vary, there are certain federal requirements that all sellers must follow. For example, there is a lead-based paint disclosure requirement on the sale of properties erected before 1978. Despite this statute, though, the seller may not necessarily volunteer such information unless you assert your right to obtain it.
If you purchase a “fixer-upper” and hire individuals to perform all the work, review local employment laws and ensure you follow all applicable statutes. Unfortunately, it is not uncommon for real estate investors to misclassify handymen. If you fail to withhold taxes or purchase adequate workers’ compensation coverage, though, the IRS can charge hefty fines. To avoid such issues, hire licensed and insured contractors who own their own companies.
3. Potential Costs of Ownership
The mortgage is not the only cost investors need to take into account when buying property. In addition to insurance and taxes, they should also account for repairs and replacements, regardless of how old the structure might be. Even fairly new appliances can break down, and tenants can cause considerable wear and tear to the property. If you fail to take basic maintenance costs into account, and something catastrophic happens, it could threaten your financial security.
If you need a reputable real estate attorney to oversee your transactions, turn to Zangari Cohn Cuthbertson Duhl & Grello P.C. With offices in New Haven, Hartford, and Rhode Island, this firm has proudly served clients throughout New England since 1946. To learn more about the unparalleled counsel they provide in a broad range of practice areas, visit their website. To schedule an initial consultation with an experienced lawyer, call (203) 789-000 today.