While zoning laws vary from location to location, they can change at any time and can most definitely affect the value of your real estate investment.
Before making a purchase, contact the local municipal office or zoning board to find out what zoning laws are in place for the property you are interested in and for the surrounding areas.
Understanding Real Estate Zoning
There are basically three types of zoning - residential, commercial and industrial. The purpose is to group similar structures together, with each area having its own set of regulations and variances that fit the intended uses. Basically, zoning helps prevent a manufacturing plant from going up in the middle of a housing development or a nightclub going next to a school.
One thing to note is that zoning laws can be changed or areas can be rezoned in the future.
Zoning and Rental Properties
If you plan to rent out your real estate investment property, make sure any applicable zoning laws are in the rental or lease agreement and that tenants understand the rules. For example, a residential area may be zoned to not allow in-home businesses. If a tenant begins a business from your rental property, you could be violating zoning laws.
Zoning and Renovations
If you’re considering improvements and renovations to the property or home, be sure the local zoning code allows for the changes you want to make. In some areas, a rental apartment over a garage or in a basement is not allowed. There may be rules about fences, sheds and or how far a deck can extend into a backyard.
It is very important for a real estate investor to know the zoning requirements of any property before they invest. Find out what these laws are and any proposed changes to save you future aggravation.
By being aware of the zoning laws and requirements, you could avoid costly and time-consuming mistakes on your investment.