Owning rental property is a great way to earn extra income, but becoming a landlord also requires the expenditure of significant time and resources tending to the landlord-tenant relationship. Here are some suggestions to help first time landlords avoid common mistakes to ensure the process runs as smoothly as possible.
Proper Screening of Tenants
Screening potential tenants is a must. Credit and background checks are among the best ways to learn if an applicant is financially responsible or not. When reviewing your prospective tenant’s credit and background reports, look out for red flags such as, bankruptcy filings, prior eviction history and criminal activity. A solid financial and background history is a predictor that a tenant will pay rent on time, is free of a relevant criminal history, and will treat the property with respect.
Know the Law
Knowing the respective rights and obligations of you and the tenant is an essential element of running a profitable rental property business. You must make sure your business fully complies with state and local laws surrounding landlord responsibilities. You should also familiarize yourself with California’s landlord rights, tenants’ rights, and the fair housing laws in your city to make sure that you are always in compliance. Since these laws differ from county to county, be sure to understand what those laws are in your area.
Prepare a Detailed Written Rental Contract
Having a written rental agreement makes it easier to prove what was agreed upon prior to tenant move-in, should any disputes arise during the tenancy. Before preparing the agreement you should thoroughly contemplate what clauses are required by law and the terms you would like to include: For example, will you allow pets? How much should you request for the security deposit? What will be your rules regarding guests? Your lease agreement should also clearly define when and how often maintenance will be performed at your rental property, and the time limit to complete said repairs.
Keep Accurate Records
As a landlord, you should keep detailed records of every tenancy-related transaction or occurrence. Maintain the records in organized digital format to ensure that a particular document can be located quickly if necessary. Having detailed records of transactions and communications will make it easier to address and resolve any problems related to the tenancy. If you have records of transactions and communications, then you are more likely to prove you’re right in court if the dispute ends up in litigation.
Property Management Considerations
Successfully renting out property requires you to learn how to manage your property effectively. Alternatively, consider hiring a property manager. Doing so can be a worthwhile investment if you’re looking to save on the time and hassle involved in owning a rental property, such as marketing your property, colleting rent payments, and dealing with tenant issues. A competent property manager can also help if you don’t want to fully commit to the hands-on role of managing the rental. Make sure to properly screen potential property managers. Always ask for local references and interview several candidates before making the decision.
Pets or No Pets?
The obvious primary benefit to having a pet friendly policy is the attraction of a larger base of the tenancy pool, as pet friendly rentals are in high demand. There are, however, many potential downsides to allowing pets to live on your property, such as potential damage to the property and noise complaints. To offset the damage, you can require a pet deposit or pet rent. Pet-friendly rentals are in high demand.
Secure Adequate Insurance
Purchasing liability insurance is a prudent way to protect yourself from any potential liability to third parties for financial loss caused by natural disasters, accidents, and other issues associated with your property. Insurance will also help you avoid a lawsuit if a renter’s items are damaged. Renters insurance is fairly affordable, and most tenants are willing to pay for it because they know their items will be protected.
Please contact our office with any questions regarding the above or the eviction services we offer. We can be reached at 888-441-2355 or info@lynxlegal.com. You can also schedule a free telephonic consultation with one of our representatives on our website.