Whether you just bought your first rental house or are planning to rent out your home while you travel the world, there are many things you need to know before making the leap to becoming a landlord.
The first question you need to ask yourself is — will you manage the property yourself or hire a professional residential property manager?
If you are out of the area often or don't want to deal with emergency repair calls from tenants, then it makes a lot of sense to enlist the help of professionals. Residential property management is complex, intimidating, and stressful, so paying for assistance often makes the most sense.
Regardless of whether you hire a property manager or not, make sure you have a clear understanding of these three aspects of residential rentals:
Here's a bit of information about each:
1. Know the State and Federal Laws of Landlord-Tenant Relationships
As a landlord, it is your responsibility to have a clear understanding of many laws, including:
Both federal and state fair housing laws exist to ensure there is no discrimination or prejudice against potential tenants based on their:
Whether you are a solo landlord or working with a residential property manager, it is your responsibility to understand these laws and ensure there is no prejudice or discrimination in tenant selection.
2. Know Your Rental Contract or Lease
In addition to anti-discrimination laws, you also need a clear understanding of your lease or rental agreement. You need to know what your responsibilities are, what your tenant's responsibilities are, and what the responsibilities of your residential property managers are as well.
The main points of importance in your lease are:
When everyone knows their rights and responsibilities, there will be a friendly but professional business relationship with as little drama as possible.
3. Only Rent to a High-Quality Tenant
As you can imagine, effectively screening tenants is vitally important to your rental property generating income. Turning over property between renters is expensive and the last thing you want is to find yourself in court trying to evict a bad tenant because no one took the proper time to screen them.
Whether you screen potential tenants or a property manager does, all screenings should include:
Immediately pass on tenants with negative credit histories, past evictions, legal problems, and those with income too low to ensure the rent will be paid.
In conclusion, it's vital you take the time and effort necessary to find a high-quality tenant likely to take as good of care of your property as you would.
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