Is This True?!? Calling Out All Investors! Beware!
I found this article on a website, warning you if you have a vacant property, in a rougher neighbourhood, and older buildings. Let me know your thoughts if any or all parts of it are true... Should we be worried?? What can we do to avoid?? The pitfalls here are vague, can anyone be a little more specific in regards to the pitfalls below, if they ever apply?
"IN SOME CASES, PROPERTY OWNERS HAVE PAID PEOPLE HUNDREDS OF DOLLARS TO TAKE PROPERTIES OFF THEIR HANDS. THERE AN INVESTORS WORST NIGHTMARE. IF YOU PURCHASE A PROPERTY IN THE WRONG AREA OR STREET,KISS YOUR MONEY GOODBYE.YOU CAN ALSO EXPECT ADDITIONAL EXPENSES SUCH AS HOUSING VIOLATIONS,TAXES AND WATER BILLS THAT ARE BUILDING UP BECAUSE YOUR PROPERTY IS VACANT BECAUSE YOU CANT FIND A SUITABLE TENANT,AND NOW ITS BEEN VANDALIZED AND STRIPED OF ITS COPPER PLUMBING,HOT WATER TANK, BATHROOM FIXTURES. AND DOORS. NOW YOU CAN EXPECT YOUR INSURANCE COMPANY TO CANCEL YOU BECAUSE YOUR HOUSE IS VACANT,OR BURNED AND NOW IT HAS TO BE TORN DOWN AT YOUR EXPENSE 10 T0 20 THOUSAND SHOULD COVER IT. IF YOU WERE ABLE TO EVEN GET INSURANCE IN THE FIRST PLACE. ALL THIS IN A YEARS TIME. OH YES THE CITY WILL COME AFTER YOU FOR THEIR MONEY AND HOUSING COURT WILL ALSO FINE AND ARREST YOU FOR VIOLATIONS. THIS IS JUST ONE SMALL PITFALL OF INVESTING IN AND AROUND REI"
[ Edited by ruizhen18 on Date 01/01/2005 ]
It sounds a little panicky to me.
I and many, many investors have rentals in rougher neighborhoods. Not every home gets vandalized, not every rental is vacant for long periods of time - besides, you check on it more frequently in rougher areas.
Most thieves I know of are LAZY. Stripping copper plumbing for a few bucks in a vacant house? Come on. There's looking for a fast grab and run deal, not to crawl under a house and pull $20 worth of copper to trade.
Insurance companies don't follow your house around that closely either. AFAIK, they drive by once a year, when you renew.
Where exactly did you find this thing?
I found it at a website from a guy advertising to sell his service, to contact him and he will do all the research for us. I was just wondering if I will need his service...
I still have some questions though...
Do we need to be worried in regards to housing violations?
Is it true that we need to pay the city 10-20K to tear the house down, when it is inhabitable?
And we will get arrested and fined for housing violations?
What can we do to avoid?
Any checklist we need to keep handy?
And do we need to pay for utilities even if the property is vacant?
That guy is using a scare tactit to sell you his service. That stuff is baloney. If your property is in Cali you don't need to pay utilities while vacant because everything needs to be shut off. Now if you invest in the cold regions then th gas/electric may need to be on to keep the house at about 50 degrees so the pipes won't bust.
Stick around and you'll learn that you don't need to pay the guy for his services.
I would think just to have electric on, it's about $10/month. We were rehabbing a property ourselves and the bill was about that (plus we were USING the electricity). Water probably the same. You're not using any. Gas I don't know, but if you aren't using any it shouldn't be that bad either. Taxes: big deal. You'd have to pay them anyway. Insurance: same. Little of a PITA, but like I said before, how long would the property be empty? A few weeks???
Housing violations - only if the place is a total craphole with broken down cars all over it. Most smaller towns and rougher neighborhoods - it's like pulling teeth to get someone over to write someone up for housing violations.
Don't worry so much.
[quote]
On 2005-01-02 11:54, ruizhen18 wrote:
Hi Monopoly,
How much would it cost to keep the gas and electric on? at a monthly basis? how about water or trash? What are the expenses or utilities that we need to pay? Other than taxes and insurance? (considering vacant)
Do we need to worry about housing violations? Otherwise we would be fine and it will be necessary to tear down at our cost?
I know that add and have read it myself little extreme.
If your going to buy a house in that area do yourself a favor contact the city and speak to tax dept, water dept, city user fee dept, county tax dept, and the building dept for violations.
Can the city fine you for things you bet they can simple things as roof needs to be done ,to over so many inches of uncut grass, as for getting arrested that is a bit far fetched you get a viloation in the mail and so much time to fix it before anyhting happens. If you going to rehab it best have a dumpster waiting out side because you will get a violation for garbage.
Before you go and buy anything in any part of the area I would inspect it first. Do not go by just out side pictures because I know of a few people who bought places only to find out the inside had been stripped.
If you can not get there for a inspection I would use some one with a few referances to look at it and take alot of picutes of the place to show me even then I would not be to quick to make the deal.
All of those things are certainly possible. I would even say that at least one of them will happen to you at some point if you invest much in rougher areas. However, much,much grieve can be avoided by keeping away from small pockets in bad areas. I've gone into detail here before so I won't explain it all again. Basically, look for older adults, and few young single guys hanging out. Toys in the yard are always a positive sign and so are public buildings within eyesight. Talk to neighbors. Whatever you do, don't waste any time getting someone in the house. Get it fixed and rented fast. Finally, I have found it much more lucrative and satisfying to sell houses to my tenants than to rent. I can bring in the same amount of profit or more. Best of all I don't get any repair calls, I don't have to look for tenants anymore, I don't have any liability for what happens at the places, and I can go on vacation,move or whatever without a second thought. My two cents.