Here are several things that, if not understood, examined, and carefully dealt with by real estate investors who buy or sell property, can easily turn a dream real estate opportunity into a real estate nightmare.

1. Accrued Interest: This represents unpaid interest, either in agreement or in default. When buying real estate investment property obtain an estoppel letter from the lender that indicates the status of the mortgage and shows the outstanding principal and any unpaid interest or other charges.
2. Adverse Possession: A claim someone else might have to the property resulting from actual, hostile, notorious, exclusive, continuous, and under claim of right such as building locations and possible encroachments from neighbors. The claim is difficult to impose, but absentee owners have been known to be oblivious and have had it surface.
3. Cloud on Title: This results from an unsatisfied lien or improperly executed document from a prior sale, mortgage satisfaction, or other legal action in the chain of title (or history of ownership). These items represent a cloud (or title defect) that you should remedy prior to taking title. This generally will appear on a title report.
4. Due on Sale Clause: Lenders insert this clause into a mortgage when they want the seller to pay off the loan in the event of a sale. Unless the lender agrees to some other circumstance, as a buyer assuming the obligations of that loan, you must satisfy the lender’s requirements.
5. Grandfather Clauses: Changes in local rules and regulations cause some properties to become nonconforming but allowed as a grandfather right. Always discuss the use and zoning of a prospective property with the local planning department. If a grandfather clause affects the property under consideration, be sure you understand what the restrictions are, especially in the event of a fire. Know whether you can rebuild and use the property for the purpose you desire.

It’s not a complete list, but it does represent some basic elements about property exchange that any prudent real estate investor should be acquainted with and understand. You might want to see our real estate glossary of terms…

Real estate investing is a business, and like any business, real estate investors have to work at it. Once the income property is purchased, therefore, and the investor becomes a landlord, the goal (unless the investment property is land) must become getting the units full, and at the highest rent per square foot possible.

This is where property management comes in, and decisions made to handle issues like parking (which typically gets overlooked by landlords).

How you maintain your rental property parking area depends on whether you have open parking, garages, carports, or a subterranean parking structure. But aside from the maintenance, there are common-sense principals about rental property parking that real estate investors are advised to understand.

Foremost, paint numbers on the spots and assign them to your tenants (even if you have open parking). Feuds between tenants in a building erupt quickly when someone monopolizes all the parking, whereas assigning parking spots to tenants do help eliminate any potential conflicts.

Extra parking spaces in your rental property can be used for several things. For an extra monthly fee, they can be made available to tenants who need more parking. Or, they can (and probably should be) designated for guest parking. Unless there are specific governing rules to the contrary, one guest space for every four units is a good rule of thumb.

Moreover, your parking area should have a sign clearly posted that says you have the legal right to remove any non-tenant cars from tenant spots. In most cases, your tenants will appreciate this. Just be sure to check with your city regarding their policies because most cities require posting a sign that cites the corresponding vehicle code and a phone number to call if a car is towed.

Parking rules should be spelled out in your rental agreements, as well as posted in the parking area. Here are some suggestions.

1. Tenants are to park in designated areas only
2. Guests are to park in assigned areas only
3. There is no storage of flammable or dangerous materials allowed
4. Car washing in parking areas is not permitted (unless, of course, it is)
5. Auto repairs or oil changing in the parking area is prohibited

Naturally, driveways and parking surfaces should be properly maintained and serviced. The last thing a landlord wants to hear is that a tenant got injured or sustained car damage due to a hole in the pavement. Besides your tenants see these areas every day, and they are part of the overall appearance of your building. If you fix small cracks and holes as they occur, it will save you a major expense later on.

Yes, real estate investing is a business, and proper management of that business, along with good management of the property is essential. The policies affecting the rental property parking area is one of those concerns about real estate investing that real estate investors should address.

Real estate agents typically miss opportunities to sell rental income property because aren’t prepared to work with real estate investment property. They lack enough rental property knowledge to talk with investors, and they don’t possess adequate tools to service investors on the spot during their first encounter with the investor.

I’ve seen it a thousand times. Real estate colleagues rush around the office just after receiving an up call or walk-in asking how to calculate capitalization rate. They wanted to make a sale, but were totally lost.

By that time, however, it was generally too late for my colleague. In most cases, at least from my experience, when an agent fails to adequately impress the real estate investor in the first encounter, leaving the investor with the impression that the agent knows or cares little about income property, the investor moves on to another agent.

It’s perplexing to me why most real estate agents don’t get it. That working with rental income property is just a matter of preparation. But rather then preparing with Armani and Mercedes, what most impresses a real estate investor is a real estate agent who understands investment property, is able to provide timely numbers, and generally displays a concern how the investor spends his or her money.

This is not difficult to do. There are plenty of resources on the web where agents can learn real estate investment terms and formulas. There is real estate investment software that enables agents to quickly run the numbers, and make quality presentations for investors. With even a slight initiative, any real estate agent can easily prepare to capture investment property opportunities and gain investor loyalty when they arise.

Best of all, the effort is worth it. Here’s a secret. Real estate investors (unlike homebuyers) often purchase multiple properties, and tend to exchange up to larger properties over time. In other words, whenever you get the opportunity to work with one investor on one transaction, you potentially get multiple transactions.

There’s no need to risk losing the opportunity. Set aside time to learn about real estate investing and budget for quality real estate investing software. Moreover, have it at your disposal beforehand, in preparation for your chance encounter with an investor. Bear in mind that you may get just one shot to work with the next income property opportunity; it will cost you not to take advantage of it.