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Five Pitfalls to Avoid when Renting Your Property
Author(s): Michelle Fabio
May 2008
You've bought the property and now you're ready to advertise that you have space to rent. Before you place that ad, here are five things every landlord should know:
1. Don't forget that renting is a business.
If you are considering renting out property, it's only logical that you treat this venture as a business and act professionally.
What does this include?
- Document the condition of the property before a tenant moves in. Take photographs and write descriptions of the space to be rented. Give your tenants a copy of the photos and written descriptions so they know what you expect the property to look like when they move out.
- Require an application of all potential renters, perform background and credit checks, and check references. Failure to do so could lead to a variety of problems later including late rent payments and damage to your property. If you're concerned with the costs of credit checks, you may want to charge a small application fee ($25-$50).
- Keep meticulous records. Document everything�the tenant's application, condition of the property, lease, payments, non-payments, repairs, etc. If it happens, write it down and date it.
- Insure the property. Often renters are only responsible for insuring their own belongings whereas you may be responsible for just about everything else including fire, storm damage, and vandalism. Be sure you are well-informed regarding what you need to insure against�and keep the insurance up to date.
2. Don't forget to write and use a written lease.
A well-drafted written agreement, or the rental lease, between you and your tenant can end up saving you money and stress later on. You'll want to cover everything that could possibly become an issue later from payment due dates to which repairs fall under your responsibility.
LegalZoom's rental lease provides state-specific clauses to make sure your needs are covered.
3. Don't forget to brush up on federal and state landlord/tenant laws.
Be informed about federal and state laws regarding housing discrimination, eviction procedures, the handling of security deposits, privacy, and more.
For example, be aware that you cannot simply pick and choose who your tenants will be. Federal law calls for fair housing, which means that you cannot discriminate against a tenant on the basis of race, creed, skin color, national origin, religion or disability.
Learn as much as you can about landlord/tenant laws before you rent in order to avoid problems in the future.
4. Learn basic maintenance and prevention tips and carry out repairs promptly.
Chances are that as a landlord you will be responsible for many repairs�big and small. If you are so inclined, learn some do-it-yourself fixes in order to save some money. That said, also be aware when a project is beyond your capabilities and you need professional reinforcements.
Alternatively, you may choose to hire a reliable property manager to take care of repairs and maintenance. Be aware, though, that you may be legally and financially responsible for your manager's actions and/or inactions, so choose wisely and monitor well.
In any event, always perform requested repairs promptly to keep your tenant happy, paying on time, and non-destructive. Also, give notice to your tenant before entering the rental unit. It is best to provide as much notice as possible, but at the very least be sure you're abiding by state privacy laws.
5. Remember the Landlord's Golden Rule: Treat your tenant as you would like to be treated.
While you want to be firm and professional as a landlord, you also don't want to alienate your tenants and make them hostile toward you. An easy way to be sure you're walking on the right side of that fine line is to treat your tenant as you would like to be treated. Here are some ways to do that:
- Keep the premises safe and habitable. Take care of any rodent or bug problems immediately and be sure to have sufficient outdoor lighting and other safety measures to discourage criminal activity.
- Also remember that withholding basic services such as heat and water from your tenants in not an appropriate way to handle unpaid rent. But you already knew that because you have studied up on basic landlord/tenant law as suggested above.
- Inform tenants of any environmental hazards, such as mold or lead, on the property. Aside from being a good landlord, you may also save yourself from legal liability later should the tenant experience health problems.
- Resolve small disputes informally. If you and your tenant disagree over an issue that doesn't rise to the level of eviction such as repairs or excessive noise, try to resolve it without attorneys. You may have to coexist with your tenant long after the disagreement has passed, so an adversarial process is best avoided. If you can't resolve the problem without outside help, third-party mediation is another option.
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