Understanding and Minimizing Landlord Risks

There are a lot of benefits to being a landlord when you make a long term investment in a rental property. You are your own boss, you can set your own hours, and the income you get can be pretty good. But there are risks if you do not know what you are doing. There are three things in particular you need to be keenly aware of: the landlord tenant laws that dictate what both you and the tenant can and cannot do, the condition of the building(s) you will be renting, and your tenants.

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CONDITION OF THE PROPERTY

Landlords must maintain their rental units in good, livable condition, and the laws in every state and municipality are going to vary with regards to what is livable and what is not. To be a respected and successful landlord, you really should be well versed in the zoning and building standards of the city that your housing units are in. This will cut down greatly on the number of misconceptions and resulting problems relative to the living conditions of the tenants. Indeed, this is a common reason for legal issues between landlords and tenants.

STATE LANDLORD LAWS

The details of the landlord tenant laws by which you must comply will vary from state to state, but the general purpose of them is pretty much the same nationwide. These laws are designed to protect the interests of both the landlord and the tenant evenly and fairly. You as a landlord are fully responsible for learning and complying with the landlord laws in your state. So if you do not know your state’s laws, do some research now so you do not inadvertently get yourself in hot water.

Laws like these are needed because the mindset of some landlords is that since they own the physical building, they can do whatever they want. While this may be true in some contexts, there are other instances where the tenant actually has more rights than the owner. These situations always have to do with the most basic necessities that people need in order to live comfortably and healthy.

APARTMENT TENANTS

You want to make sure to always select good people to move in to your rental units. Doing an extensive credit and criminal background check on prospective renters is the primary means by which most landlords select quality tenants. Additionally, it is helpful to always maintain a personable attitude when it comes to dealing with applicants; a professional yet friendly attitude will help you build a rapport with the potential tenant which will help you determine whether the prospect is worthy of renting one of your apartments.

One thing to keep in mind is that, although very important, the results of your tenant screening activities are certainly not all-encompassing. Just because people have bad credit or a criminal history doesn’t necessarily mean that they will be bad tenants. The specific circumstances that have conspired to degrade their credit worthiness, or that landed them in trouble with the law, are things you will definitely want to know.

Personal references can be a good way to garner such information, and can also shed some light on whether or not the tenant is trustworthy, hardworking and honest. In the final analysis, deciding who to rent to should always be based on professional reasons that are considered to be within current laws.

BOTTOM LINE

By understanding and obeying your state’s landlord tenant laws as well as your local municipality’s zoning and city code regulations, and following best-in-class tenant screening practices, you can dramatically reduce your business risk. This will make your investing activities run smoother, and will put more money in your pocket.

Source : articlopedia