Protecting Your Investments: 5 Things Every Property Owner Should Look Into
Wednesday, January 21, 2015, 6:00 AM | Leave Comment
Even the home you live in is an investment. For most people, it’s the biggest investment they have. Some people are fortunate enough to invest in other property too, and use it as an investment along with rental income. With all that money tied up, you’ll want to do what you can to protect your investment.
These are a few things that real estate investors do.
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The Property Title
If you own investment property in your own name, you’re exposing your personal assets to any liens or judgments that might attach to it.
Setting up a legal entity to hold title to any investment properties you have is relatively easy and inexpensive. That can operate to protect your personal assets.
If you live in a state that recognizes land trusts, you might want to look into that alternative too. Land trusts can provide anonymity of ownership.
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Proper Insurance
The investor that leases property undertakes risks and perils outside of those of the homeowner. Nothing dampens the enthusiasm of owning rental property more than unpaid rent.
Expenses then come out-of-pocket, and that hurts. Along with sufficient insurance to cover the total loss of the property, damage, liability and your personal property on the premises, you’ll want to consider coverage for rent or default losses.
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Use Quality Leases
Spend $20 and buy the best form lease you can find for your state over the internet. Yes, you’ll pay $5.00 per page. That’s because the publisher knows you’re going to copy it and use it again and again.
You want an airtight lease with specific provisions for tenant default, landlord’s remedies, costs and attorney fees.
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Provide Legal Disclosures
Some states, counties and municipalities require legal disclosures to be provided to tenants along with confirmation of receipt thereof.
Find out what disclosures you might have to provide and require the tenant to sign them at time of entering into the lease. If you don’t provide them, you’re exposing yourself to lawsuits.
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Maintain the Property
Whether it’s your primary residence, vacation home or investment property, you have a significant investment in it.
That investment depreciates if you don’t maintain it. For example, roofs keep the elements out, the HVAC system heats and cools the premises, and plumbing provides water and rids the premises of waste.
Failure of any one of these will significantly damage and severely depreciate the investment so making sure to maintain your property.
Making sure professionals, like those at United Roofing, make repairs in a timely manner can mean a world of difference for your property and finances.
Unless you know something that other investors don’t know, you’re probably investing for the long term. Keep that investment fine-tuned and well maintained to maximize your return.
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