There are three factors that you should be aware of when you look to buy rental houses here in the suburbs.
Knowing these, and acting on them, will substantially reduce your risk as a rental house owner.
The three factors are:
1. Never own a property in your name
While I’m not an attorney, I recommend holding your rental properties in a Limited Liability Company, or LLC.
If you and your property manager operate your LLC correctly, it will give you liability protection against lawsuits that may attempt to go after other properties you own or money you have. Talk to an attorney or CPA if you have questions. I can refer you to the people I use.
2. Always insist that the seller give you a Warranty Deed and a Title Insurance policy when you buy
A Warranty Deed gives you the maximum amount of assurance that you’re getting clear title to your property. Don’t settle for anything less.
Title insurance protects you in the event that there is something wrong with the title. This is common in most transactions here, and every reputable seller will willingly pay for it. If they don’t then find another seller.
3. Buy adequate property insurance before closing
This will protect you from weather related and other unexpected issues that may arise.
The key with property insurance is to be sure you get adequate coverage, but not too much coverage. Over insuring your property is a waste of money and will reduce your cash flow.
I recommend you also deal with an insurance agent and company that are experienced with rental properties in this area. I’d be happy to refer you to the people I use.
To get a free copy of my 6 Step Guide To Buying Turn Key Rentals In Metro Detroit, visit http://www.SuburbanTurnKey.com