Expert Advice for Rochester NY Landlords
Q: My friend and I would like to begin investing in rental properties. Where can we get advice on protecting ourselves from lawsuits and other problems?
A: You should consult with the following experts:
An attorney, with experience representing real estate investors, can advise you on:
- The advantages and disadvantages of the various forms of ownership i.e. partnerships, limited liability corporation and corporations.
- Various forms of financing, including seller held mortgages.
- Contract of sale contingencies for financing, structural inspection, review of leases and municipal approvals.
- How to make the best use of leases, rules and regulations, move-in/move-out checklists and tenant applications.
- Proper handling of tenants security deposits.
Real estate appraisers can provide an unbiased opinion as to a property’s value and highest potential rents.
Building inspector (town, village or city) can provide information on:
- Building code violations for a particular property;
- Maximum number of tenants permitted in a building;
- Whether alterations you intend to make will be permitted;
- Requirements for smoke detectors and certificates of occupancy;
- Zoning information.
An accountant can advise you on:
- The tax aspects of various forms of ownership;
- Suggestions on record keeping;
- Tax deductions, capital gains treatment, tax shelters and rehabilitation credits;
- Tax filing requirements;
- Annual reporting of security deposit interest to tenants.
- The tax assessor has information on the assessed value of the land and buildings, when the assessed value was last increased, whether there are any assessments for special improvements and details of the building.
- An insurance agent can advise you on umbrella policies, worker’s compensation insurance, boiler and machinery coverage, renters insurance, rental loss coverage and the necessary amount of fire insurance and liability insurance coverage.
- A banker can provide information on special mortgages for investors, closing costs, the amount of down payment required and special security deposit accounts.
- An environmental consultant will do an investigation to determine whether there are toxic wastes or hazardous materials on the premises.
- Other experts include utility companies which can advise you on energy savings and separate meters; real estate sales agents; the police who can provide advice on making your buildings more secure and home inspection companies.