Don't Let Mold Steal Your Real Estate Riches

Back in 1997, a copper pipe burst in the wall of one of my properties. My plumber and I tore the wall open. He patched the leak. I let the hole stay open for about a month before I closed it up again. I repainted the room and moved on to the next job.

Then a few of my friends started asking me questions. Had I left the wall oven long enough to let the area behind it really dry, they wanted to know? Had I sprayed behind the wall with bleach to kill mold spores? Why didn’t I get an expert to make sure that mold wasn’t growing back there, ready to wreck my property and my investment?

I thought they were crazy. It sounded like paranoid nonsense to me. And luckily, I dodged the bullet, because I never had a problem with mold growing behind that wall. But a year later when I happened to be in western Canada, I saw dozens of homes boarded up because of mold damage. And that scared the heck out of me and made me see that mold really can wreck a property.

So when I was writing my five Make a Fortune in Real Estate books for Trump University, I decided to learn everything that I could about mold. Let me share some information with you, because it could potentially save you from catastrophic losses in the properties you own.

How Serous a Problem is Mold?

Very serious. You really don’t want mold in your buildings - not if you live in them and not if you have tenants. According to the New York Times, about 10,000 mold-related lawsuits are now filed in America each year. And according to the Insurance Information Institute, American insurance companies pay $2.5 billion in mold-related claims a year, most of them in Florida, Texas and California. That’s serious money.

But there are ways to reduce the chances that mold will wreck your investments.

Avoid buildings in low-lying, flood-prone areas. Also, buildings with past moisture problems such as flooded basements, leaking roofs or bust pipes.

• Have your building inspector look for visible and hidden signs of water damage and mold growth. Your inspector can inspect interior surfaces of walls by inserting a fiber-optic viewer through a small hole drilled in them. If you suspect moisture or mold, your inspector should also collect air samples in all rooms (basement, crawl spaces, attic, garage) and send them to a lab for testing.
• Remember, buildings with forced-air heating or central AC can be especially vulnerable to mold, because spores can spread through the air ducts. Your inspector should test for spores in ducts and outflow grilles.
• Be suspicious if you discover fresh paint in moisture-prone areas such as on sheetrock that covers a crawl space. It could be an attempt to conceal stains and discolorations.
• Have your attorney find out whether lawsuits or insurance claims have ever been filed by residents of apartment houses and condominiums you are considering.
• Ask your insurance representative about how to obtain adequate coverage to protect you from mold-related problems such as loss of property value and tenant claims. (Also visit The Environmental Risk Resources Association, as noted below, for information on policies that can product you.) Even better: If you suspect mold in a building, don’t buy it!

 For more protection, check out these resources . . .

• The National Association of Industrial and Office Properties.
• The Environmental Protection Agency’s Indoor Air Quality resource page.
• A Brief Guide to Mold, Moisture and Your Home, a publication of the Environmental Protection Agency.
• The Environmental Risk Resources Association. (Offers information on mold insurance.)

Learn more ways to safeguard your real estate investments by enrolling in Trump University’s Real Estate Investor Training Program. Classes are forming now.