When you purchase a property that the seller is occupying (home or office) you can 1w sure there will be a trash problem that needs to be attended to. Take this into consideration when you make the offer, as ills easier to simply anticipate an expense and not include it in the transaction. By this I mean that if you anticipate three days’ work for your trash company to pack up and haul out trash, then set aside that money. The alternative is to simply put into the contract a provision that the property will be delivered to you with floors taken down to the base flooring (wood, concrete, terrazzo, or other), walls stripped of wallpaper, and all trash, furniture, and fixtures (except those listed in the contract) removed.
Even the best occupancy history will not be loo percent all the time. Working up a pro forma balance sheet of income and expenses for any multiple tenant property should include a vacancy factor, which is a reduction of potential income. Many local tax assessors’ offices have some local history of occupancy and the corresponding vacancy factor for properties in your area. Check them Out, and increase them by a margin of 2 percent to be conservative. If they are using 6 percent vacancy, for example, increase yours to 8 percent.
That beautiful lot you purchased on which you plan to build a small medical building has a dozen live oak trees and several other exotic hardwood trees. You check with the local authorities, and they say you need a tree removal permit. You didn’t check that out and have already closed on the lot. Now you discover you will have a battle with the city just to remove enough trees to provide room for the building and parking. Before purchasing any property with trees, check to see what the rules are that govern this process. Keep in mind that there may be subdivision rules that exceed those of the community. Some communities have strict rules that if you remove a tree you must replant it or a replacement elsewhere on the property. This can be very expensive, but even when that rule is in place look for an exception.
In one Situation I had a 60-acre tract of land that was zoned for commercial use: however, the previous owner had applied for agricultural use, which while it did not change the zoning greatly reduced the real estate tax for 10 years as the owner kept cattle on the fomoer bell pepper farm. I had an offer to purchase the property at a very attractive profit, but I had to remove the trees that had been planted some 20 years earlier as windbreaks for the pepper plants. These trees were now 30 to 40 feet high, and we counted over 4,000 of them planted in rows around lOI) feet from each other that ran nearly half a mile in length. Word from the city was that we had to replant similar trees in the same exact number as were removed. I knew there had to be a way around that, and I discovered that on agricultural land farmers were allowed to clear the land of all trees. I leased the property to a You-Pick-It farmer I knew for one dollar for the year it would take for the developer to get the approvals he needed to build a private hospital and a shopping center next W it. Two days later. every tree was part of a dozen piles of trees, limbs, and stumps that were, one at a time, set ablaze. The resulting strawberries plus a crop of bell peppers were the finest that had ever come from South Florida. Between the years of cattle oil the site, plus the highly nutritious ash from the burned trees, not an ounce of fertilizer needed to be used. As it turned out. it was nearly three years before the developer was ready to Start construction, so everyone benefited. The project was completed some years ago and is a fine example of a well-landscaped hospital campus with a matching shopping center alongside.
Title will be verified by a qualified closing agent (who can also be your lawyer), and basically there are several critìcal elements. Has the chain of title been properly handled from day one until the present seller is going to pass it on to you? Are there any outstanding debts, liens, or clouds of title (hat must be cleared before you can get good title? If there Is any doubt about that. insist that It must be done prior to your paying for the property.
Wallpaper looks nice, but it is expensive, and to replace it first requires the removal of the old wallpaper. Don’t be led to believe you can paint over old wallpaper. While this might be the case with some types of wallpaper. you may discover that the wallpaper you arc dealing with is the wrong kind. There are many unique looks that can be applied using paint that will save you money in the long run. My advice is to avoid the use of wallpaper.
Landscaping and yard maintenance is important to demonstrate pride of ownership. This ensures you attract the right enants for your rental properties, and a good landscaping plan is one that allows the vegetation to mature and increase in value. If you arc purchasing an income property with extensive landscaping, pay close attention to the cost shown by the seller of the present maintenance. If it seems low, you may discover the owner is (or says he or she is) doing the work. In any event, get a price from a local lawn maintenance company or two. Be sure you explain the extent of work they are to do.
For the many reasons mentioned in this content, you should be fully aware of the zoning of a property you anticipate purchasing. To do this, go Ic) the community zoning office and first verify that the property is within that citys boundaries. Then check the zoning map and check the classification of the zoning. Review the zoning code content and read the use allowed and all restrictions pertaining to that zoning. If that seenis reasonable and you understood everything that you read, ask if there are any other codes that also govern, modify, or restrict what can be built oit this property. There will be some such as parking. setbacks, deed restrictions, height and density rules, and distance from a school or church (which may prohibit an allowed use). Read those rules and restrictions. If you plan to move forward, purchase the zoning content, or at least pay to have the pertinent pages copied for your files.