Renting out your
property might seem to be a simple task, it is not one the riskiest one.
Apparently, it might seem that it involves purchasing a house, renovating it
and then using it to earn money through rent. But, without proper knowledge and
experience there is a high chance of getting into trouble when being a
landlord. A little carelessness can cause you not only loss of money, but also
your time and energy. We are not telling you not to rent out your house. We are
just advising you to take the following precautions when letting your house or
other type of unit on rent.
1. Rental agreement or lease.
Do not take this
document lightly. It is legal proof stating all the details related to the
mutual understanding regarding your property. It contains the names of both
parties, the details of the property on rent, the amount of rent and date it is
due, and other important clauses. Iin short, it legally certifies that you are
renting or leasing your property. In effect, it allows you to knock on the door
of the law in case of any trouble. In case you do not have a rental agreement
you will not have any back-up stating the fact that you have rented your
property and in dire scenarios, it might also cost you your property.
Background verification of the tenant
While you might be very
keen on earning money from your property, you should ensure that you have a
thorough check of the tenant’s background before renting it out. Get his
background verified by third parties, check his creditworthiness, and take
feedback from his previous landlords. This will speak volumes about the
tenants’ nature and whether it is safe to lease your property to him. Even if
the tenant is in a hurry and is ready to pay you extra or the deposit
immediately, it is our responsibility to take time and do proper verification
before concluding on the right tenant.
on rent solely
While you can earn a
good sum of money from rent, you should not purchase a property depending on
it. There might be months when you will not find any tenant, and if you have
taken out a house loan, it will be a burden during those months. So, do a
proper calculation of your income and expenditure before taking any financial
decision. Rent is a good source of secondary income, but ideally, it shouldn’t
be the primary source of income based on which you pay your critical bills.
4. Recurring cost of maintaining the property
Do not take maintenance
issues casually. First and foremost you must come to a mutual agreement with
your tenant regarding who will bear the recurring cost of maintenance and what
share of it. Often landlords tend to ignore it as it seems to be a meager cost,
but remember it is recurring and can cost dearly.
Also, be sure you take
care of damages immediately as small damage left unattended will aggravate and
become a big expense in the future.
Lastly, if you plan
properly for your property’s maintenance, you will be able to rent it out on a
regular basis, as a well-maintained property is always preferred over a
5. Knowing the laws of the state
Each state has housing
laws, and you must be sure you adhere to them. In case you are not aware of the
laws and do something wrong, you might end up yourself into trouble or bear a
heavy financial burden.
According to the Fair
Housing Act, you cannot discriminate between your tenants based on gender,
color, creed, origin, religion, or disability. In fact, you should also think
before asking intriguing questions. While you need to know about your tenant,
you should not be interfering in their personal lives and also you cannot be
biased toward their choices as long as they are legal.
A dispute between landlord and tenants is a very common thing, and it can happen because of various factors. If you can settle the matter peacefully, it is good for both the parties or you can opt to hire a law firm like Express Evictions, which can help you to get a tenant evicted quickly and legally. They can reduce the hassle and help you to secure your property at minimal costs.