Buying in America

[ali_alic]

We have just seen a property that we wish to buy in America as a rental investment. What are the main pitfalls that we should try to avoid. Its in a good holiday area and the present owners rent it out to holiday makers so we should be OK there. Any good advice you can offer?

[Clanad]

I'm sure many of the laws in the U.S. are similar to those in the U.K. for purchase of real estate. One of the major factors to consider is determining the state of the title. That is, are there any liens against the property. A good title search company charges a reasonable fee and is usually done as part of the transaction, but in addition to the title being clear, it's important that the local courthouse for the county in which the property resides, be searched to see if there are any mechanics liens. This would be for work done on the property by tradesmen that weren't paid and to protect themselves they file a lien and this may not be public knowledge. Secondly, reserve, if possible, a percentage of the purchase price in an escrow account for at least a year. The purpose of this, and your real estate agent will advise you, is to pay for something that is obviously the fault of the builder. Such as pipes leaking or variances that were not obtained. Other than those, rely on your real estate agent, but keep the cardinal rule in mind, that the agent actually is working for the seller, not you and therefore, doesn't have your best interest at heart... Welcome to the U.S., by the way!

[Barryboy]

Watch out for agent's fees - they can be disproportionately high. Another ptifall is local taxes (basically similar to our council tax), management charges for looking after communal areas and above all don't forget that Americans are incredibly litiginous. You will need first class insurance cover.