There are many benefits to owning when you make a long-term investment in a rental property. You are your own boss, you can set your own hours, and the income you earn can be quite good. But there are risks if you don’t know what you’re doing. There are three things in particular that you should be very aware of: the landlord-tenant laws that dictate what you and the tenant can and cannot do, the condition of the buildings you will rent, and its tenants.
Landlord and Tenant Laws
The details of the landlord-tenant laws you must comply with will vary from state to state, but the general purpose of the laws is largely the same throughout the country. These laws are designed to protect the interests of both the landlord and the tenant equally and fairly. You, as a landlord, are entirely responsible for learning and complying with the landlord laws in your state. So if you don’t know the laws in your state, do some research now so you don’t inadvertently get into trouble.
Laws like these are needed because the mindset of some owners is that since they own the physical building, they can do whatever they want. While this may be true in some contexts, there are other cases where the tenant has more rights than the landlord. These situations always have to do with the most basic needs that people need to live comfortably and healthily.
property condition
Landlords must keep their rental units in good habitable condition, and the laws of each state and municipality will vary regarding what is habitable and what is not. To be a respected and successful landlord, you really must be well versed in the zoning and building standards of the city in which your housing units are located. This will greatly reduce the number of misconceptions and resulting problems regarding the living conditions of the tenants. In fact, this is a common reason for legal problems between landlords and tenants.
your tenants
You want to make sure you always select good people to move into your rental units. Doing a thorough credit and criminal background check on prospective tenants is the primary means by which most landlords select quality tenants. Also, it helps to always maintain a pleasant attitude when dealing with applicants; A professional yet friendly demeanor will help you establish a relationship with the potential tenant that will help you determine if the prospect is worthy of renting one of your apartments.
One thing to keep in mind is that, while very important, the results of tenant screening activities are certainly not all-encompassing. Just because people have bad credit or a criminal record doesn’t necessarily mean they’ll be bad tenants. The specific circumstances that conspired to downgrade their creditworthiness, or landed them in trouble with the law, are things you definitely want to know.
Personal references can be a good way to obtain such information and can also shed some light on whether the tenant is trustworthy, hard-working, and honest. Ultimately, deciding who to rent to should always be based on professional reasons considered within current laws.
conclusion
By understanding and obeying the landlord and tenant laws of your state, as well as the zoning and city code regulations of your local municipality, and by following best tenant screening practices, you can dramatically reduce risk to your business. This will make your investment activities run smoother and put more money in your pocket.