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Avoiding common real estate investment mistakes

On Behalf of | Jan 12, 2018 | Real Estate Law |

Real estate investments in Ohio and around the country have generally performed well in recent years, but the market can be unforgiving when individuals make hasty decisions and fail to perform adequate due diligence. Individuals who are considering a portfolio of multifamily units or commercial properties can avoid costly mistakes by understanding the complexity of these transactions and learning from the experiences of those who have succeeded and failed in this area.

One of the most common commercial real estate investment mistakes is purchasing properties without first studying the local rental market and considering factors such as its replacement cost and growth potential. A multifamily unit in a thriving community where apartments are scarce may seem like a sound investment, but the numbers could look very different if developers are in the process of seizing the opportunity and large amounts of new construction are planned. Major infrastructure projects could also cast a new light on these types of investments.

Many novice real estate investors fail to grasp the amount of work involved in managing and maintaining rental properties. Collecting rents, handling evictions and complying with state and local regulations can be extremely time consuming, and emergencies often occur when landlords are least prepared to deal with them. Delegating these tasks to real estate management companies provides investors with peace of mind, but the costs of using such services should be taken into consideration before deals are consummated.

Attorneys with experience in this area may be able to help investors to avoid common mistakes by performing due diligence on their behalf. Attorneys could provide information about pending construction projects and help their clients to choose a respected property management company. They could also work to ensure that the deals are concluded speedily.