How to Reduce the Headaches of Being a Landlord
For those who can tolerate the hassles that come along with being a landlord, there are advantages to owning a rental unit. Besides owning and building equity in the property itself, renters often pay at least the amount of the mortgage for the rental unit, helping to defray the costs for the landlord. Take precautions to reduce the impact of problems that come with being a landlord.
- Difficulty:
- Moderate
Instructions
Things You'll Need
- Rental property
- Lease forms and other documents
- A good record keeping system
- Bank account separate from personal accounts
- Time and willingness to adequately monitor the rentals, or a competent trustworthy agent to do so on your behalf.
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1
Check with the city clerk or other local government office to determine if there are any zoning or other code restrictions or requirements on use of the property for rental. Are there off-street parking regulations, trash disposal or other stipulations? Different municipalities place varying responsibilities on landlords and property owners for utility connections and fees. Is the landlord or tenant responsible for them, and are there potential scenarios where you might get stuck with a tenant's bills? If you consider dividing the building into multiple units, would they be permitted in that neighborhood?
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2
Do a thorough physical inspection of the property, and correct any deficiencies before advertising the property for rent. Check out the electric, heating, plumbing systems for any needed repairs or safety concerns. Make sure all doors and windows are sound condition. Check roof for any sign of leaks. Note any exterior potential hazards like broken concrete walks, shaky steps or tripping or health hazards in the yard. Look for evidence of pest or rodent infestation.
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3
Obtain a well-drafted lease form designed for your jurisdiction. Joining a landlords' association can be money very well spent as those organizations usually have lease forms that cover all the important bases in clear language that has been tested in court. Many landlord-tenant cases that come into court do so because there is no written lease or there are disagreements over interpreting the terms of the lease.
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4
Do a walk-through with the tenant at time of signing the lease, and make a checklist of any existing damage or items that need corrected. Make sure the tenant has a chance to read the lease and have any provisions clarified or explained. If any lease provisions are changed, both the landlord and tenant should initial and date the changes on both the landlord and tenant copies. Each party needs to have her own copy of the signed and dated lease. When the tenant moves out, do another walk-through to compare the condition of the property with the check sheet from the time of lease signing.
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5
Get the first month's rent and the damage or security deposit before the tenant is permitted to move anything onto the property. Failure to insist on the full amount lets the tenant know you are likely to give in to future requests for deferred rent payments, and some months down the road when the tenant is so far behind he won't likely catch up, chances are good you will end up in court proceedings for eviction.
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6
Be firm in insisting that the rent be paid on time. Be fair and courteous, but the first time the rent is late remind the tenant that payment is needed to cover your costs. Give the written notice that is required in the lease. Landlords who are lax may invite tenants who fail to maintain the premises and ignore other lease provisions.
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7
Respond promptly to problems with the property that are the landlord's responsibility. Failure to timely repair a leaky roof or broken heating system, for example, may expose the landlord to liability for costs far exceeding those repairs.
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8
Keep a separate bank account for your rentals and a well-organized and efficient bookkeeping system. Clearly define when, where, how and to whom the rent payments are to be made. Escrow damage or security deposits so they are available for return to the tenant when and if that is applicable, or to repair damage if necessary.
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Tips & Warnings
Include a provision in the lease that allows the landlord to enter for inspection at reasonable times.
Understand the court process and procedures. Most jurisdictions have some kind of printed guidelines or website that explains them. If you feel you need to hire an attorney, use one who is knowledgeable about landlord-tenant law and procedures in your jurisdiction. It's quite frustrating and embarrassing to have that high-priced corporate or criminal lawyer represent you and end up losing what should be an easy case because of unfamiliarity with procedural rules or other technical issues.
Don't let tenant move in until the first month's rent and the security deposit are paid in full.
Don't rent without a written lease.
Don't let tenants get behind in their rent.
