Recently a fellow investor said to me, “Boy, I never realized that I would need a Ph.D. in biochemistry to be a successful real estate investor.” Needless to say he caught me off guard with this remark, and then he explained what he meant.  He started to rollout all the biochemical issues real estate investors have faced over the last twenty years; “uffie”, do you remember urea-formaldehyde? It was used for home insulation during the sixties and seventies until it was discovered to give off toxic fumes if it wasn’t installed properly.  Then there was radon gas, asbestos, lead-based paint, mold, vermiculite, and methamphetamine labs.  What happened to the times when landlords only worried about tenants paying their rent? Meth Labs seem to be increasing in popularity because methamphetamine is a cheap and relatively simple drug to produce.  Meth labs pose serious problems for rental property owners.  Among these are a loss of rent, a decline in property values, damage of property, civil penalties, dangerous and threatening tenants, resentful and angry neighbors, and the potential loss of other valued tenants.  A publication from the National Real Estate Investors Association, stated that if you are suspicious of illegal activities on your property you should visit the property often and look for the following meth lab indicators: Blackened windows, drawn curtains; Frequent visitors at all hours; Paranoid, odd behavior; extensive security; chemical odors; Orange Igloo coolers- when tenant is unemployed .  Watch for excessive garbage specific to meth lab manufacturing.  These item include; over-the-counter cold medications, packaging from “pep” pills, rock salt, brake fluid & fuel injector cleaner, propane gas tanks with corroded nozzles, lithium battery strips, pool or battery acid, respiratory masks, gloves, Mason or Ball jars, coffee filters, lighter fluid, and dirty, brown baby diapers - - without kids around .  Yes, it isn’t easy being a landlord out there today.  We must be vigilant, cautious, and aware of what is going on at our properties.  Regular inspections are a must, and be prepared to act swiftly when a problem arises.  Mold, chipping lead-based paint and meth labs don’t just go away.  If not addressed immediately, a small problem can become a major issue of concern, and can have a serious effect upon your business.  

Good Investing,  

Ron Watcke
President Real Estate Investors Association of Oakland