Tehama Country Real Estate

Tehama Country Real Estate – 3 Real Estate Spotlight By Alex Mason uying a choice piece of commercial property can be a terrific investment and give you a good income for years to come. However, it is not that easy to play the game correctly and be the victor every time. B Before you buy a commercial investment, you must understand that there are circumstances and mitigat- ing factors that can make or break your deal. It is a bit Pollyannish to assume that you simply buy a proper- ty and swiftly collect the rent without a hitch. Like anything else wor- thy in life, there are a few rules, regulations and issues to understand before you take the financial plunge into commercial real estate. Location They say that location is everything in the world of real estate, and this is very true when it comes to investment. You want to buy a bargain property in a better part of town to ensure your rent collection will be high enough to cover your investment costs. If a commercial building is drastically reduced and you feel pressured to sign on the dotted line, this is a good indicator to investigate the cash flow history and walk away. Cost Factors The commercial property is going to have taxes due, be in need of general repairs from time to time and is still expected to give you a profitable sum at the end of the month. The itemized cost versus income report must be calculated by the past owner and shared with the prospective buyer. If the property is cumbersome and does not yield a tidy profit, you still may use it to aid with your cur- rent tax situation as a deduction. However, if cash flow is an issue and you cannot make it happen with- out imposing a dramatic rent hike, walk away. Renter's Rights Many states honor the rights of the tenants above the rights of the landlords when a legal dispute aris- es. Evictions are extremely difficult to execute as the U.S. Marshall's office gets involved and the case has to go before a judge. If the outcome of the court decision is in favor of the landlord, the case is not yet settled or resolved. The real pressure begins with the eviction process of the tenant, which could takes months and cost the land- lord a lot of money. In addition, the tenant will either be forcefully removed from the property, or in the worst case, the law enforcement officials must wait the tenant out to secure the home with a county lock. Either way, this long and drawn-out procedure can create a financial burden to the landlord with lost rent, court fees and the uncer- tainty of when they may replace the delinquent renter. You need to make sure you know the laws in your state, follow them, and have the necessary cash reserves to spend in case you have tenant prob- lems. Fair Housing Act The Fair Housing Act is a document to aid and assist the landlord to know their rights and bound- aries with a tenant. Violations of the Fair Housing Act may be subject to lawsuits and, in some instances, arrest. It is the landlord's responsibility to know the local laws that protect both landlord and tenant and be sure to enforce the fair housing principles with every client. In a court of law, there is no such defense as saying you didn't know. To become a landlord carries with it a load of responsibility, and when it gets down to the legal issues, a landlord is expected to uphold the law. Doing the right thing in your head does not always mean you are doing the legal thing the courts expect. So, if you wish to become a landlord, you need to get busy and study the books to ensure you don't get hauled into court and have to "tell it to the judge." Alex Mason is a former real estate agent and mortgage bro- ker living in Los Angeles. What You Need to Know to Become a Landlord

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