Perhaps you’ve long wanted to generate a revenue stream from real estate investments and finally have the capital to do so, or perhaps your investments have so far been more hands-off, but you’ve found an opportunity to buy that’s too good to pass up. Real estate can be a stable investment alternative to an uncertain market. If you’re planning on purchasing real estate for investment purposes for the first time, there are certain things you should know to ensure that your interests —and money—are protected. Read on to learn important tips for first-time real estate investors in Maryland.
Ask lots of questions about the property and where it’s located: It is critical that you understand the history of the property you’re considering, any defects, and any features which will need to be repaired before it can begin to generate income. Additionally, you’ll need to look into the neighborhood in which the property is located—are businesses flocking to the area, or moving away? What are the crime rates in the neighborhood? Are there unusual or restrictive zoning laws? Are there any upcoming construction projects which could affect the neighboring real estate values?
Do the math on the complete costs of the property: All real estate purchases involve more costs than the initial asking price, but investment properties go beyond a standard home purchase in supplemental costs. Be sure you understand the additional costs of insurance, regular repairs, landscaping, and a property manager, as well as any prepayment penalties or short-term financing costs, if you’re planning to quickly “flip” the property.
Understand the liability involved with an investment property: Any real estate ownership brings some risk of liability, since property owners may be liable for injuries that occur on their land. These risk can be even greater where the owner doesn’t occupy that property and cannot personally inspect it for hazards. Be sure you’ve found a skilled attorney who can represent you in any actions for civil liability prior to making a purchase, and have your attorney explain the particular liability concerns for the types of property you’re considering before you invest. For example, the risks of liability will be very different for an apartment building full of tenants, as compared to a retail store front occupied by a business.
Get help from professionals: As when embarking on any new endeavor, you should surround yourself with people who know more than you and can support you as you learn the ropes. This means consulting with an experienced sales agent and seasoned real estate attorney who can guide you through the process of making a sound purchase.
For assistance with real estate and real property legal questions in Maryland, contact the effective and seasoned Annapolis real estate lawyer Matthew S. Evans III for a consultation, at 410-626-6009.