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5. Know where your tenants are coming from If last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect tenants' security deposits at closing.
6. Assess tax situation Taxes are an integral part of successful real estate investing, and they often make difference between a positive cash flow and a negative one. Know tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.
7. Investigate insurance coverage If seller's coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.
8. Confirm Utility Costs Ask local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant's rent.
9. Consult Your Accountant Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with constantly evolving tax code.
10. Inspect! Make sure that you always perform a thorough inspection of property before buying it. Never, ever buy any property without at least examining site. In some cases, hiring professional inspectors to examine structural mechanical system may be a sound investment.
Neda Dabestani-Ryba is a licensed Realtor in Maryland. She is a member of the President's Circle of Top Real Estate Professionals. She can be reached at (800) 536-3806 or visit her website for more information: http://neda.dabestani.pcragent.com/ Prudential Carruthers REALTORS is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.