Getting started with real estate investing is a long, hard road, but it comes with many potential benefits. However, many beginners don't understand the importance of legal considerations when starting their investment journey. Unlike many other forms of investment, real estate involves buying and selling physical property, which can lead to numerous legal pitfalls.
If you're considering real estate as a true, long-term investment vehicle, there's a good chance you'll want to work with a lawyer, especially as you're just getting started. While real estate lawyers can help in a range of critical ways with your investments, here are three particularly nasty problems they can help you avoid.
1. Deed and Title Issues
Real estate can come with surprisingly complex histories, meaning deeds and titles aren't always as straightforward as they may seem. Previous owners may have incurred debts that resulted in liens against the property, and there may even be unexpected disputes about ownership. A title search can reveal some issues, but it's rarely a do-it-yourself process.
A skilled real estate attorney can help you understand any complexities or issues that may arise with your investment property before you sign on the dotted line. These problems can lead to substantial legal headaches in the future and may drastically reduce the value of your investment. Working with an attorney from the outset helps you sidestep these ugly complications.
2. Contract Issues
Any agreement to buy or sell a property involves a contract, and high-value properties such as real estate require ironclad legal documents to avoid future disputes. The deed and title issues that may appear on properties are often the result of poorly constructed or misunderstood contracts. While it might seem like you just need some boilerplate, this one-size-fits-all approach can be dangerous.
A good real estate attorney will understand not only real estate contracts in general but contract law in your specific state. They can help ensure your purchasing contract protects you both now and in the future so that you don't run into issues when you attempt to sell your property or use it as a rental location.
3. Lot Line Disputes
Lot line disputes are a common issue in real estate, but they can be a major headache for investors. If you plan to flip your property or use it as a rental, it's crucial to know the precise position of the property lines. Mistakes can lead to hassles when making improvements or attempting to sell the property to prospective buyers.
A real estate lawyer will help you confirm the existing property lines and, if necessary, work with neighbors to resolve any disputes. Attempting to resolve these disputes on your own can be time-consuming and may ultimately reduce the value of your new property. An experienced attorney will maximize your chances of a favorable outcome so you can enjoy the full value of your investment.
To learn more about property investment, contact a real estate law firm in your area such as The McCormick Law Firm, LLC.