8 Tips for How to Protect Yourself as a Landlord in Renting Residential Property
Editor’s Note: Being a landlord isn’t always easy. In fact, it’s rarely easy. And, it’s actually a bit of a financial risk. There’s plenty of upside, but it’s not for the faint of heart. Have you wondered about ways that you can minimize your risk when you start looking for investment real estate? Here are 8 great tips to help you. Thanks to Landon Murie for contributing this guest post!!
Anyone who has rented a home or apartment to someone has hoped to be lucky enough to have a tenant who will care for the property. Sometimes everything works out fine, other times not so much. This goes for both long term rentals and short term rentals, but for today we will be talking more about long term.
Most states have landlord-tenant laws based, at least in part, on the Uniform Residential Landlord Tenant Act of 1972. The law serves as a model law to clarify and standardize the rights and responsibilities of both landlords and tenants. We want to help you understand all the things you can do to further protect yourself as a landlord.
You should also keep in mind that if you don’t want to deal with everything we are about to cover, you can always consider hiring a reputable and successful property manager in your area. This article covers some characteristics of what a successful property manager does and focuses on.
If you do decide to take on the task of being a landlord all alone, here are some basic guidelines to protect you, the landlord, and your property:
1. Put everything in writing.
This applies equally to landlords and tenants. I hope you never have the unpleasant task of resorting to court action to evict a tenant. But, if you do, the judge will want to see the key written documents relating to the property. This includes the rental agreement and any modifications, inspection reports, receipts, repair requests and correspondence between you and your tenant.
2. Ensure your rental agreement is specific and clear.
There are many standard rental/lease agreements available online that work as a good starting point. You can modify them as needed to provide greater clarity and add specific provisions which may be unique to your circumstances.
3. Deposit and fee requirements should be very specific.
There are a variety of deposits landlords can require, including security, damage and pet deposits. The name for the deposit type often determines how the funds can be used if needed.
Security deposits are to secure payment of the rent and utilities. However, you can also use them to repair damage if the rental agreement allows for this. Damage deposits are to fund physical repair and restoration of the premises for anything beyond reasonable wear and tear. Pet deposits are for fixing any damage specifically caused by an animal. This may include carpet cleaning or yard and fence damage.
4. Conduct a walk-through of your property with the tenant within one week of a new tenancy.
Create a written report of the condition and cleanliness of each room. Be specific. The completed report should be signed by both the landlord and tenant. Keep the original. Provide a copy to the tenant. Most states require this report if a landlord charges a damage deposit at the time of rental.
5. Keep the property in good shape.
Following a written request from a tenant for needed repairs, start work in a timely manner. Failure to undertake repairs may allow the tenant to terminate the rental agreement. That may also require repayment of any rent for the time the tenant was unable to reside in the property. Repairs needed to provide electricity, heat, or hot and cold running water must often begin within 24 hours of written notice. Repairs to plumbing, stoves and refrigerators must usually commence within 72 hours.
6. Follow proper procedures to evict a tenant.
Eviction begins by giving timely written notice to a tenant. For month-to-month tenancies, landlords can generally terminate a tenancy for any reason as long as the proper notice is given in writing 20 days before the end of the month. If the tenant moves by the end of the month, no further action is needed.
However, if a tenant continues to reside in the property after the end of the month, formal court action must be initiated to force the tenant to leave. Courts usually have an expedited process to file and process these cases. However, until the court signs an eviction order, sometimes called a “writ of restitution,” the tenant can remain on the property.
7. Understand your legal limitations.
As frustrating as it can be to have a tenant who is behind in rent or failing to properly maintain the property, landlords usually cannot lock a tenant out, shut off utilities to encourage a tenant to vacate or seize a tenant’s property. Similarly, landlords cannot physically throw a tenant off the property. Leave that duty to law enforcement after obtaining a legal eviction order.
8. A happy tenant is often a good tenant.
Aside from following legal requirements to protect your rental home, a few basic people skills can go a long way to cultivate loyalty and encourage care for the property. Treat your tenants with respect. Promptly respond to their requests. If the tenants are new to the area, provide a written list of some of the stores, schools, restaurants and local facilities, including directions. Reward your renter with movie tickets or a small gift card for consistent on-time rental payments or tenant referrals.
Following these legal guidelines and paying attention to the needs of your tenant should help to safeguard your property and achieve ongoing success as a landlord.
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Please leave a comment below! What’s your tip for protecting yourself as a landlord?
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