We’ve all had those calls: “I’m looking to buy a property in this area. Will you take over management? Will you manage it?”
You look at the property and think, “Sure, let’s give it a go.” Then you discover the court system is backed up 60 to 90 days.
What does that mean for an investor? If you have a resident who isn’t paying rent, you may have to wait 60, 90, or even 120 days just to get in front of a judge and work toward getting the unit back. The timing depends on the lease and local process, but either way, that’s a lot of lost revenue.
This goes back to an earlier blog and podcast I did about what to check before purchasing a property. Review the delinquency. Make the current owner address the bad debt and deal with problem tenancies through the proper process. Get the units turned before you get to the closing table.
The same principle applies after you buy. If you screen poorly and place an unqualified resident, you may face the same long wait to get in front of a judge. The difference is that at least you know it was a decision made under your ownership. You didn’t inherit the problem from the previous owner.
A deal can look great on paper, but make sure you understand the local court process and the condition of the rent roll before you decide it’s a good investment.