Financial Crisis and Rental Property as a Good Real Estate Investment
By: Tilden Moschetti
All real estate transactions must be pursuant to relevant real estate law. The paperwork involved can be quite overwhelming: the real estate contract, escrow, closings, title insurance, property rights, and even matters related to the homeowner association.
Before negotiating, get legal services from reliable real estate professionals. Competent Calabasas real estate lawyers can explain details of a real estate sales contract and other things related to buying and selling real estate.
In any negotiation involving real estate, getting legal advice and exercising diligence are necessary for home buyers and sellers. This article will cover the impact of the financial crisis on buying or selling property, particularly rental ones. It includes:
According to the U.S. Census Bureau, homeownership has significantly declined. In 2012, homeownership in the US was at 65%, several points lower than its 2004 high of 69.2%. Homeownership in California, meanwhile, dropped to 54.1% from its 2005 high of 60.1%. With this is a growing local market for renters.
The rental market for real property has also been influenced by equity. According to a March 2013 report from the Lender’s Processing Services (LPS), 9 million or 18% of homeowners had negative equity. This is 47% less than the 2006 peak of 17 million. Another factor is the purchase price of homes. As of March 2013, according to a Case-Schiller report, the sale price of homes in the U.S. rose 9.3% compared to the preceding year.
Because of the factors above, many real estate agents and brokers in the real estate market are asked about possible investments from residential or commercial real estate property. Tenants who would have wanted their own home but can’t afford rent payments are drawn to renting property, particularly if they feel more like their new home than a typical apartment. (As the rental property owner, it is important to be familiar with landlord-tenant law, together with state law on landlord and tenant relations that must be taken into account).
What must be done when proceeding with such a real estate purchase
One of the first steps in the process is real estate brokerage. After negotiating with a licensed real estate agent or broker, the next step for most home buyers is qualifying for a mortgage loan from a lender. Generally, it is often less complex and less difficult to find lenders for Residential Real Estate when compared to Commercial Real Estate. Just keep in mind that, any action done should be under any relevant statute when you negotiate with a creditor.
There are a lot of other factors that you must consider for you to not be at a disadvantage. For one, aspiring real estate property owners would first need to look into the size of the property and the likelihood of necessary repairs and upgrades soon. Other non-negotiable matters that must be inspected include foundations, roofs, waste collection systems, septic tanks, and other things that a home inspector would look into when conducting an inspection. Also, try to take into account other factors that an appraiser will check during real estate appraisal.
The need for reliable Calabasas real estate lawyers
Deciding to buy or sell real estate property is not something that should be rushed. Indeed, getting in touch with a real estate broker and looking into a property for sale by the owner (from the local multiple listing service) are exciting things to do. However, prospective buyers must be very careful because significant amounts of money are involved. There are several local market factors and specific aspects of real estate law that one must be familiar with, especially if you are considering buying a property for rental purposes.
At Moschetti Law Group, our practice serves the needs of Founders by providing real estate law and real estate syndication attorney services to Founders. Whether you are the Founder of a real estate empire or building a business and need assistance with purchase and sales, real estate transactions, or real estate litigation, we serve Los Angeles County, eastern Ventura County, and North Orange County from our office in Calabasas. We also have a primary focus on helping Real Estate Syndication Founders throughout the United States with forming their syndication, understanding crowdfunding, private placement memorandums, and operating agreements.