The property should be in an area where the demand for rental housing exceeds the supply and there is access to public transportation, churches, schools and stores. This will ensure good rents and resale price.
Failure to check utility costs
Under the New York Truth-in-Heating Law, sellers and landlords of residential buildings, including one and two-family residences, condominiums, cooperatives and apartments, must provide prospective buyers and tenants with a summary or a copy of heating and/or cooling bills for the preceding two years and a statement of the type and location of insulation installed by the owner and previous owners. Determine whether the utilities are separately metered.
Zoning or building code violations
Determine whether the building and planned renovations conform to zoning ordinances, building codes, deed restrictions and loan requirements of the bank, VA or FHA. Also, inquire as to whether a certificate of occupancy is necessary.
Assuming personal property stays with the real estate
The contract of sale should state what appliances, equipment, furnishings and other personal property are included with the sale.
Defective or dangerous property
The contract of sale should contain a clause that the sale is contingent on a inspection by a professional inspector, licensed engineer or licensed architect. Ascertain whether the property contains lead paint, asbestos, mold or other hazardous materials.
Assuming that there are no leases
The seller should be required to furnish copies of all leases, tenant applications and move-in/move-out checklists prior to closing. Since the purchaser will be bound by any leases between the seller and his or her tenants, the purchaser should study the terms of the lease very carefully for such items as the expiration date, rental amount, tenants right to sublet and whether the lease is renewable. If there are no leases, the contract should specify whether or not the units must be vacant at the time of closing, assurances that the seller will not enter into any new leases, the amounts of security or cleaning deposits, the names of the tenants and the monthly rent amounts.
Expecting to close on the "closing date".
The closing date stated in the contract is merely a target date, unless it is specified that "time is of the essence".