In a perfect world every house would be occupied and properly maintained. But, as you know, we do not live in a perfect world. Therefore, there are vacant houses. If you own a house that is vacant, you should consider selling it. Vacant houses are more of a liability than an asset.
Houses become vacant for a number of different reasons. The owner passed away, the house is an inheritance property and the family is fighting over it and who will take care of it, no property manager or poor performing property manager, or the home needs repairs just to name a few.
NEGATIVE CASH FLOW
Negative cash flow is probably the most common and most important liability that comes with owning a house that is vacant.
Mortgage – If there is a mortgage on the property, the mortgage is still due even if the property is vacant.
Property Taxes – Same as the mortgage, even if the property is vacant, the property taxes still have to be paid.
Utilities – If the utilities are still on, they have to be paid too.
Maintenance – Regardless if a property is occupied or vacant, it still needs to be maintained. The yard still needs to be mowed, HVAC systems need to be maintained, etc.
Insurance – Because of the risks that a vacant house brings, insurance policies on vacant properties are usually more expensive.
Vandalism & Crime – Criminals are always looking for opportunities to take advantage of others. If you own a vacant property, there is a very high chance criminals in the area know about it. They know which houses are vacant and which ones are occupied. They also know a lot about the neighbors. Unoccupied houses are at risk of being broken into and be vandalized, used as a drug house, prostitution, etc.
Squatters – By definition, a squatter is someone who settles on land or occupies property WITHOUT title, right, or payment of rent. Believe it or not, squatters have rights.
Trespassing – Most of the time, there are clear signs of a property being vacant. The visible signs of a vacant property become a target around the property. If the property is not properly insured, someone can break in to that property and injure themselves and the owner could be held responsible.
Natural Disaster – Natural disasters are out of our control. However, when we have the right warning, we can do things to protect our property. But, if you do not live close enough to the property, that becomes more of a challenge.
WHAT CAN YOU DO TO PROTECT YOUR VACANT PROPERTY?
If you own a vacant property, there are some things that can be done to help protect you.
Have a home security system installed – There are a number of different types of security systems available. You can have cameras installed and even monitor your property online. Security systems can alert you when something is wrong with the property. And, simply having a security system sign in the yard can deter criminals from breaking into your house.
Insurance – Get the proper insurance coverage on the property that will protect you from the various disasters described above.
Maintenance – Have a landscaping company regularly maintain the property. This can also deter criminals as it can look like someone lives there. Criminals usually target the uglier houses with taller grass where it is clear that no one lives there.
House Sitter – You can hire a house sitter to come “occupy” the property from time to time. The property must be up to code and be livable condition.
Make it look like someone lives there – You can allow neighbors to park a vehicle or two in the driveway. If the utilities are on, have them leave the porch light on and maybe one light inside on from time to time. Have someone visit the property as well. Have someone get the mail and any trash, phonebooks, and advertisements off of the porch.
Just because a property is vacant does not mean that these things will happen, but the risk does increase.
If you own a vacant property, you should consider selling it. Contact us at your convenience and let us show you how we can take a property off your hands.
Disclaimer: This is general information and is not meant to influence your decision in any fashion as there are other things involved. When signing a contract of any kind, it is always advised to obtain legal counsel. This is just general information and must be verified…
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