@Gwen Fyfe Thank you for your thoughts. I agree that all safety issues should be repaired including lead.
However, Why is it appropriate for the city to only require rental owners to test for a lead safe environment and not owner occupants. Did the city require you to hire a certified lead inspector to test the home you live in?
Characterizing a rental property as a “luxury” property is a stretch. The idea exists out there that all or most rental owners are wealthy and thus should bear the cost of 80 years of neglect by everyone else.
I certainly agree that all homes should be lead-safe for children and everyone else. I will not take on management of a property where the owner does not care about safety issues. Indeed, I recently resigned as property manager at a property where the owner refused to mitigate the lead safe issues. But I understand, the reason he is walking away, is because he simply does not have the resources to bare this expense.
The fact is that most investors of 1-4 unit rental property in Cleveland are regular working people, who scrape together savings to make an investment in housing. They hope to earn an 8% to 15% RII. They are not making a luxury purchase... that would be the second home on the beach or in the ski resort.
In any case, we are off track here because the point of my article is that investing in real estate is not a casual investment, and that investors need to understand that many cities are looking for investors to cure the failures of the city.
Investors need to be aware of the point of sale inspections, pending lead safe requirements, rental registration requirements, vacancy permit requirements, local property tax policies, enforcement of waste requirements, permitting policies, contractor registration requirements, etc. before they buy. I know from experience that these issues are often an afterthought.
I know that most investors are unaware of these nuances, because among the properties that I manage; the owners are stunned to learn of them.
The city of Bedford where you live was forced to cancel mandating point of sale inspections because the court deemed them to be unlawful search and unjust enrichment to collect inspection fees in this situation.
As I said in the original post some cities penalize the investor if he lives out of town by making her pay an additional fee.
In some cities, investors are charged in Grimaldi court if a tenant fails to bring in an empty trash bin with 12 hours.
State law requires all home owners to declare any known lead paint issues. But now Cleveland is proposes to require investors alone to prove that the home they bought is lead safe.
Gwen, I once had the city of Euclid tell me that the property could not be rented until all cracks in the driveway (minor cracks) were sealed. It was February. Thus the house was to sit empty until Spring.Result: cracks filled in February, knowing that the material would not hold due to cold weather installation.
I had the Maple Heights inspector tell me that the owner was required to resurface an asphalt driveway. When I pointed out that the driveway next store was in much worse condition, he stated that the home next store is owner occupied.
A city official in Garfield Height told me just yesterday, that if residents had it their way; all rental property would be banned! The fact is that some municipalities do not want investors. It’s as if they would prefer boarded up houses.
Again, my post was not about lead. We all agree that no child should become ill because of lead paint. Yet, simply painting a house resolves the problem of lead paint danger... but when the city gets involved, only a certified registered lead specialist is permitted to paint the house... doubling the cost. An owner occupant can get assistance, but not a rental owner.
@Joel Fine I agree that an inspection is of value. Should a city (Cleveland) begin mandatory inspections of all rental properties, when there was no such requirement when the investor purchased the property?
With respect to the new Garfield waste ticket policy, a city official admitted that that the purpose is to force owners to evict tenants who violate their waste policy (specifically leaving an empty trash bin on the tree lawn for 12 hours). I told her that a housing court judge would laugh at me if I attempted to evict for such a silly reason.
Garfield Heights has the highest propert tax rate in the state. When an investor buys and renovated a home, the investor will be rewarded by an annual property tax liability of 4% of the new valuation.
In summary, do your homework.
