Becoming a landlord is an exciting venture and an overwhelming undertaking. There's a lot that goes into renting out your property, especially if you're doing it for the first time, from finding and screening potential tenants, creating rental agreements, and collecting your rent.
But before you begin advertising your open units, there are certain things you should know to ensure a successful venture.
Local Landlord-Tenant Laws
As a landlord, it is vital that you know the local, state, and federal landlord-tenant laws. For example, the Fair Housing Act of 1968 protects applicants from discrimination related to their age, color, disability, family status, religion, and sex. Individual states also expand on these protections and tell you how you can advertise your property and screen tenants.
Rental Price
Before you list your property for rent, it's a good idea to spend some time crunching the numbers. Make sure to list all costs associated with the home, including mortgage payments, property taxes, utilities, maintenance, and other expenses you may have to make when you have a tenant.
Next, figure out how much you want in monthly profit so you can set your rental rate. Once you have your monthly price, check other rentals in the area to see if your rates are competitive.
Create a Lawyer-Approved Lease Agreement
Your rental lease agreement is the backbone of your property. The lease agreement will address a number of things, including requirements, house rules, and disclosures that you and your tenant are legally bound to.
While you can create your own lease agreement, we recommend hiring a lawyer to go over the document and ensure it isn't violating any laws. While this will cost you time and money, it helps keep your investment safe.
Insurance
When you have a rental property, taking out homeowners insurance is not enough. Without the proper insurance, you will take on some degree of responsibility for a tenant's safety.
In addition, insurance will keep you from paying expensive repairs out of pocket. For instance, if a branch fell and caused extensive damage that renders a unit unsuitable for renting for some time, insurance could cover the cause of the repairs. It could also cover the losses you incur due to medical bills or legal costs should anyone sustain injuries on your property.
