Thinking of renting out a property you own and becoming a landlord? Here are a few things you ought to know regarding rental laws and more…
Inside bonfires never end well.
For Brandon Turner, becoming a landlord was easy, it was the next part that got tricky. After placing his first tenant, it appeared Brandon had found the perfect person. However, after 3 months, the tenant decided to stop paying rent.
After several late notices, Brandon finally filed for eviction, and the tenant immediately vacated the property.
However, whether on purpose or by accident, the tenant had left a box on top of the stove, with the burner on. The fire destroyed the kitchen and caused smoke damage throughout the house.
Landlords are constantly having to put out all sorts of fires. Whether it’s troublesome tenants, navigating state laws, or managing repairs, a landlord’s work is never done.
However, when you have the right tenants and know what you’re doing, the life of a landlord can be a profitable one. Read on to learn what you need to know to stay safe and make money as a landlord.
Becoming a Landlord
As you start learning more about becoming a landlord, you’ll realize, this isn’t your typical 9-5 job. Landlords don’t get to clock in and out, nor do they have the luxury of working regular hours. Sure, some days will be a piece of cake, but other days are bound to be much more challenging.
To be a landlord you have to get ready for exhaustive, labor-intensive days, along with a whole new world of paperwork.
It’s not uncommon for a landlord to spend his or her day screening new tenants or repairing items at their rental properties. It’s hard to predict what your day will be like in the morning because as a landlord, anything can happen.
For example, you could have plans to swing by the property to simply collect a rent check.
However, once you arrive your tenant informs you about a small plumbing leak. Now, it’s up to you to decide if the leak is something you’ll handle on your own, or if you’ll need the professional help of a plumber.
How to Act as Landlord
If you’re the type of person who enjoys variety, and a bit of uncertainty throughout the day, then the role of the landlord would work with your lifestyle.
However, along with the willingness to do what it takes, landlords also need to possess a certain type of temperament. Here are some of the traits a good landlord should possess:
- Ability to follow through
- Consistency
- Business mindset
A common mistake new landlords make is being too nice. Your rental property is a business, and you must treat it as one. When you accept late, or partial payments from tenants, you’re setting yourself up for problems.
Having the precedent that it’s okay to pay late, will make it hard to evict your tenants, should you have to go to court.
State Security Deposit Laws
The rental laws vary among states for both landlords and tenants. Similarly, a commercial landlord tenant law will be different than a residential one.
To be successful as a landlord, you’ll want to become very comfortable with your state’s particular laws.
Let’s start by looking at the laws surrounding security deposits.
- Security Deposit Maximum
- Security Deposit Interest
- Separate Security Deposit Bank Account
- Additional Non-refundable Fees
- Deadline For Returning A Security Deposit
- Require Written Description / Itemized List of Damages and Charges
- Receipt of Security Deposit
Certain states will have strict laws about how much you can charge your tenants for a security deposit. However, other states, don’t have any statutes regarding the maximum amount of deposit you can charge.
Laws Surrounding Leases and Fees
Once you understand your state’s laws surrounding security deposits, you’re ready to move on to lease laws.
Along with the lease laws, you’ll also need to learn the rules surrounding collecting rent, and late fees.
Here’s a shortlist of all the lease, fees, and rent terms you’ll need to learn about:
- Rent Increase Notice
- When Rent Is Due
- Application Fees
- Late Fees
- Returned Check Fees
- Prepaid Rent
- Tenant Allowed to Withhold Rent for Failure to Provide Essential Services
- Tenant Allowed to Repair and Deduct Rent
- Landlord Allow to Recover Court and Attorney’s Fees
- Landlord Must Make a Reasonable Attempt to Mitigate Damages to Lessee, including an Attempt to Rerent
It’s not uncommon for states to leave it up to the landlord’s discretion when it comes to increasing rent. However, when rent is due, it usually carries with it a more strict state statute.
Typically, rent will be due at the beginning of each rental period, without demand or notice. Unless you reach a separate agreement with your tenant, you should expect rent payments to be consistent.
What Landlord Will You Be?
There are over 48 million active rental properties in America today. As you consider joining these landlords, you should ask yourself, “What type of landlord do I want to be?”.
Here are a few questions you can ask yourself to determine your goals:
- Will you use 3rd party management services?
- Commercial or residential properties?
- How many properties will you rent?
- Will you do annual leases or month to month?
- Do you have a team for repairs or will you have to outsource work?
While you have the ultimate responsibility for a long list of ongoing tasks, this doesn’t mean you have to do everything alone.
As you read the different responsibilities, think of friends and family members that might help complete them. The more help you can have as a landlord, the less overwhelming the entire experience will be.
Lease Properties With Confidence
Now you know more about what goes into becoming a landlord. We hope that our article will help you be able to confidently rent your property to new tenants.
When you know what you’re getting into, and plan, your journey as a landlord can be a profitable one.
Are you ready to find more ways to bring prosperity into your life? Let us help you get the insight you need to take your finances to the next level. Go ahead and check out the rest of this site today!
