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The benefits of commercial property investing

There are several reasons why real estate investors in California and around the country may be drawn to commercial rather than residential properties, and this may be especially true when they are landlords. Residential renters often complain belligerently about relatively minor issues, and they may ask their landlords to intervene when they become embroiled in petty disputes with their neighbors. However, commercial tenants rarely bother their landlords unless the situation is pressing and their options are limited.

Customers often associate businesses with their locations, and the owners of thriving stores or restaurants may be extremely reluctant to uproot even when their rents are raised substantially. While residential tenants may have sentimental attachments to their homes, these feelings will rarely be enough to stop them from moving if they find a nicer house at a lower rent in a more desirable area. When businesses do move, they will generally try to do so amicably to avoid negative publicity, disputes and possible lawsuits. Residential tenants will generally be less concerned about being sued.

Understanding the rights of a tenant

Those who wish to rent property in California have many rights. For instance, a landlord cannot reject an application for an apartment because of a person's race, gender or religion. Landlords also cannot reject applications from people based on their national origin, because they have children or because of a physical or mental disability. On a state or local level, there may be laws against discrimination based on sexual orientation or marital status.

Landlords are not allowed to advertise or otherwise imply any preference or restrictions on those who may be in a protected class. Tenants may not be harassed by their landlords or be put in different facilities because they are of a protected class. Policies related to late or missed rent payments must be handled in a consistent manner without regard to a person being part of a protected class.

How residential property is titled and transferred

California residents who have purchased a home know that completing a residential real estate transaction involves signing copious amounts of documents and dealing with a profusion of legal issues. Deciding how residential properties will be titled is a crucial consideration when more than one buyer is involved, and understanding the differences between joint tenancies and tenancies in common can prevent bitter legal disputes should one of the buyers die.

The word "tenant" is derived from English common law and means "owner" when used in residential property transactions. When more than one party is involved in a real estate acquisition, they may hold title to the property involved as either joint tenants or tenants in common. The main difference between these two ways of taking title is how real estate is treated when one of the tenants dies.

Challenging a property tax assessment

California residents who wish to challenge a tax assessment may meet with an assessor to make their case. However, the request must be based on solid evidence as opposed to a general complaint that the rate is too high. For instance, it may be possible to get a reduction if the assessment was based on an extra bedroom or bathroom that the house doesn't have.

It may also be possible to get a reduction if the assessment was based on the wrong tax rate or other erroneous math. Homeowners may challenge the validity of comparable sales figures used to determine how much their homes were worth. If a home has an undocumented pest infestation or a crack in the foundation, it may be enough to have the home's assessed value reduced by the taxing authority.

Tips on buying a home

Buying a California home for the first time can feel overwhelming, but prospective purchasers should keep in mind that they can remain in control of the process throughout. First, it is important to decide how much to spend including closing costs. A person who is interested in a particular house might want to see what comparable homes are worth. Prices may be driven up or down by the local real estate market.

There are two considerations that could increase the amount people decide to offer for the home. One is any unique characteristic that make the home particularly valuable to them. This could be anything from the home's location near a desirable school to something less tangible like an architectural feature that a potential buyer likes. They should also try to put themselves in the seller's position and think about what could make the offer attractive based on the seller's individual needs.

Reasons to have a home inspected

When buying a home in California, it is important to have it inspected by an independent professional. This is because most homeowners will present their homes in the best possible light to prospective buyers, which means that an individual may not see its flaws right away. Typically, the inspection process occurs either before making a formal offer or after the offer has been accepted.

An inspection may help to reveal whether the HVAC system still works or whether or not the roof will last for another year or longer. These are items that buyers may not think about when they first see the house, but they are still important components of a home that can cost a lot of money to repair. According to the American Society of Home Inspectors, more than 90 percent of home sales involve inspections from either the buyer or the seller.

Avoiding foreclosure with a short sale in California

When homeowners in California run into financial difficulties and owe far more on mortgages than their properties are worth, their lenders may sometimes agree to accept what are known as short sales. Short sales prevent lenders from taking even larger losses and allow them to avoid paying the costs involved in pursuing foreclosure. However, these complex real estate transactions can be time-consuming and difficult to close.

Since lenders lose money when they accept a short sale, they only consider them when certain requirements have been met. Borrowers must be able to show that they have been coping with financial difficulties for some time and are unable to refinance their mortgages to lower their payments. Some lenders may demand that the property involved be placed on the open market for a specified time in order to better evaluate the short sale offer.

Buyer competition driving residential property prices

With the Fed looking to increase interest rates again this year, many potential home owners in California may feel that now is the time to buy. However, low supply in many markets has resulted in bidding wars and steep price increases that are blocking many entry-level buyers from the market. An economist with Trulia announced that sellers have the upper hand in 2017, and it is unclear when residential development companies will be able to capitalize on the growing need.

Evidence of the sellers' market isn't hard to find. Even as the average 30-year mortgage rate has increased almost half a percent, the median price of residential property has jumped almost eight percent. It will take a significant correction in supply to make a dent in rising prices as well. The Denver market, for instance, is still amenable to sellers with a growth in residential inventory of 6.5 percent this year.

Interest rates and commercial real estate

California commercial real estate investors and developers might be aware that interest rates are rising and expected go up twice more before the end of 2017. This could create a slowdown in the sector because borrowing money will become more costly. On the other hand, the higher interest rates means a stronger economy, and this could be good for commercial real estate. Overall, property prices are expected to decrease as cap rates rise.

Business leaders report optimism about the economy although the head of the Federal Reserve says that economic growth is expected to be moderate in the next two years. Because of the expected increases in interest rates ahead, many borrowers may be eager to refinance. The last interest rate increase was 0.25 percent, and this brought interest rates up between 0.75 and 1 percent.

Spec home building is booming in Southern California

Residential real estate markets in many parts of Southern California have been extremely active in recent years, and industry experts say that the resulting shortage of supply has led to a rapid increase in speculative building. Custom builders are also being attracted to the region by soaring prices. Residential properties in prime parts of Santa Monica are now selling for more than $4,800 per square foot according to the real estate information company DQ News, and prices in other upscale areas like Beverly Hills, Pacific Palisades and Marina Del Rey are also rising fast.

Some of the speculative homes built in Southern California take luxury and opulence to new heights. A mansion built on a Bel Air hilltop features soaring views of Los Angeles, 38,000 square feet of living space and the Golden State's largest infinity pool. The property has been placed on the market at an eye-watering $250 million, which includes a luxury car collection worth an estimated $30 million.

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L. Scott Karlin

L. Scott Karlin

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David E. Karlin

David E. Karlin

David E. Karlin is a California attorney with a primary focus on business and real estate, including law and legal issues...

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Michael J. Karlin

Michael J. Karlin

Michael J. Karlin is a Southern California based attorney whose practice primarily focuses on Entertainment Law. Michael began...

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