The following update has been provided by Renee Kunz, office manager at Intero Real Estate in Hollister.
When you own investment property, there are common legal and economic risks. This is not a complete list as new claims come up but it is something you should note. My point of sharing this with you is not to stop you from buying investment property but to make you aware of liabilities that can occur and what can help to protect you.
First, there are premise liability claims. That is personal injury on site. Typically it is a slip and fall situation at an apartment complex. It could also be a dog bite. The main way to protect yourself on this issue is having property and casualty insurance with the proper limits.
Real Estate is expensive in California and some times you need a partner to invest with. It is a great solution but it can be problematic. One may want to sell or refinance and the other doesn’t so a dispute arises. Remember this is a business and you should seek advice from an attorney and to draw up a well-drafted partnership agreement that addresses expense payment, how profits are divided etc.
These are just two of the many issues that can come up. I am not an attorney and the subject matter is very important. When you buy investment real estate, make sure your team of professionals are all on the same page and providing the appropriate advice. In my opinion, three of the most important members when going down this path include, but are not limited to your realtor, certified public accountant (CPA), an exchange organization and an attorney. These professionals will help you get on the right path!