Five North American Real Estate Quirks to Watch Out For
[caption id="attachment_2822" align="alignleft" width="300"] Image Source: Nicolas Vollmer[/caption]
Property sales and prices have continued to heat up in many Canadian and US cities, according to data and bullish international investment analysts, there are still more value to be found in both nations.
However, not every property is a deal, even those priced right at the bottom of the market. Here are five scenarios, which may influence your success when trying to invest alone in today's market.
Few home buyers and North American real estate investors think to ask about rights when purchasing property. There are air, oil and mineral, timber and access rights, which can all be sold and leased. This may not only impact the enjoyment of the property, but future resale appeals and value as well.
2. Building Codes
Most are familiar with the concept of maintenance codes or even minimum size requirements for building new homes in certain communities. However, there are also building, zoning and use codes that require some properties to effectively remain the same even if rebuilt. This can definitely alter the direction of your development plans.
3. Grow Ops
The Canadian Press recently picked up on the fact that banks and insurers are increasingly getting away from properties that may have been used as former marijuana grow houses. They don't want the liability and they don't want to be stuck with them if loans go bad, which can also impact the ability to resell these properties. This issue can also crop up with unusual houses, mobile homes, and properties with small square footages. If they would be harder for the bank to sell in a default situation, they will be less likely to finance them and that will surely reduce the number of potential buyers available to purchase your house.
4. Meth Labs
American real estate can be a literal minefield of meth labs in some counties. In Tulsa, Oklahoma alone, law enforcement has identified almost 1,000 known meth lab sites. The DEA says there have been 84,000 lab seizures in the last 11 years alone, but admits only around 5 percent are ever discovered. One clean up company founder says there are millions of these properties in the USA. Fortunately, tests can be conducted for as little as $50, but the remedial work can cost $10,000. That's in addition to medical bills.
5. Chinese Drywall
The massive Chinese drywall problem is much like that caused by methamphetamine labs. Thousands of homes were infected by poisonous drywall during the heated building boom of the early 2000s. It can be found in cheap foreclosure homes and multi-million dollar mansions alike. The poisons can corrode piping and cause serious health problems even after being removed. There are some remedial guidelines, but some investors feel that reselling or leasing these homes to families is not the right thing to do.
In order for North American real estate buyers to navigate the market safely and profitably, they must know what to watch out for, as preparation and proper financial planning can save you a ton of time and financial headache in the future.