Being an Ethical Real Estate Investor

Ethics is defined as a system of moral principles and the rules of conduct governing a particular group etc. In real estate, as in any business, it’s important to maintain a set of ethics.

One of the reasons for the humongous bailout that was signed into law in October was the unscrupulousness of mortgage brokers. They allowed risky loans on appraisals that did not accurately reflect the true value of a property. And they sold mortgages to people who had poor credit and were really unable to make the monthly payments to the bank.

That’s why it’s important for real estate investors who are buying and rehabbing properties to conduct themselves with a high set of morals and ethics. Even though it has become more difficult for honest investors to secure home loans because of the unethical behavior of others in the industry, it is important to not lower your ethics or standards to make a deal—especially when your ethics can be called into account.

When you’ve purchased a property, rehabilitated it and are ready to rent it out, keep in mind that you are expected to act with a set of ethics when landlording to your tenants.

You have an obligation to maintaining the property for the tenant who is renting and the neighborhood as well. If your tenants are not law abiding, cause problems for their neighbors and do other behaviors, it is up to you to develop a plan for evicting them. Even if they’re paying you on time, you owe it to the others in the neighborhood to rid your property of an unethical tenant.

It would appear that many landlords are just happy to have someone in their property paying the rent and thus providing the landlord with liquid capital, but if the tenant is causing problems for the neighborhood, the only action is eviction. Finding a new tenant who follows the rules would be worth the few months of keeping the property empty rather than allowing the problem to remain.

Being an ethical real estate investor is important to the neighbors you buy your property around and to the industry which has suffered a black eye in the recent past.

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