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FREE REPORT

Before You Buy A Rental

SECRET # 3 -- Do Your Due Diligence

Local Rental Regulations – If you are about to buy a property, consider and study up on what your local regulations are.
Many cities and towns consider rental properties to be more like businesses than residences and are treated as such. Make
sure your property complies with Zoning and Fire Codes and if there are inspections required by local officials for rental
properties, and does this property pass those inspections. You never know the real reason the current owner is selling the
property.

For instance if you have a converted basement, does the basement have the required size and opening radius to meet
egress standards? Also what are your legal height requirements for finished rooms? If you already bought a rental
property and the upgrades or any improvements were not finished to code by the previous owner, your town or city official
can actually require that all finish work be upgraded. Or worse he/she may require you to tear it all out and start over. If
you have tenants in place living there, you’re not let off the hook in fact you can be forced to relocate them at your expense
and fined if you refuse until the city standards are met.

This can be very expensive if you buy a house without properly inspecting the property and its history. Make sure that all
rehab work and or building improvements such as adding basement bedrooms and a bathroom were done with proper
permits. If you live in a city or town that treat rental properties as businesses, chances are you won’t be allowed to do any
of the work yourself. Meaning you will have to hire an architect to draw and seal the plans and then you will have to hire
the general contractor to make sure the plans are properly approved by the city, the list goes on.

Other things you may consider when considering a rental property.

● Cement Slab Construction – no crawlspace or basement means ground floor plumbing is an expensive pain in the
lower posterior region to access or replace.
● Laundry on the second floor – Should the hose leak or machine overflow, congratulations on having to remodel
the entire first floor.
● Off street parking – Is it available and is there enough space for the number of tenants you will have residing
there.
● Ease of access/materials – Remember a house that has solid, simple construction where the plumbing, electrical,
heating and cooling systems are easier to reach and that uses standard materials is generally the most inexpensive
and the easiest to maintain. 4 corner buildings are the usually the simplest to maintain. The general rule is that
more can go wrong with more corners or more complex buildings. Bottom line is that maintenance and repairs are
crucial to the success of you investment!!!
● Hardwired Smoke detectors – These are becoming a regular requirement. Does your building have them? What
will it cost to put them in?
● Certificate of Occupancy – For a fee many towns or cities require a new one for every change of tenants plus a
yearly CO inspection (for yet another fee)
● Good Rental History - Whenever buying rental properties, you must check the rental history. Check to see, do the
tenants pay on time and what is the average length of stay. Bear in mind that location will affect your turnover
times.

All these factors and many more can affect your purchase price and you need to account for them so you can, say it with
me, BUY RIGHT!

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