If you are interested in purchasing real estate as an investment and creating a second source of income, renting it out and becoming a landlord is a great way to do that. There are many advantages to becoming a landlord, and it can be a great way to make a large amount of money. It can also become a hassle quickly if you do not take steps to protect yourself. Many things can go wrong for you as a landlord, but there are ways to protect yourself if you take the right steps. It does not take much for a great situation to go wrong, and the next thing you know, you are being sued by your tenant. Follow these three steps, and you should be able to avoid litigation.
Step 1: It is reasonable to screen those who are applying to rent your property. You must screen carefully. You are allowed to check the credit history, criminal record, and background to make sure this is someone that is going to honor their contract with you and not destroy your property while there. However, you are prohibited from discriminating against someone for their race, gender, religion, national origin, disability, or family status. This means you cannot refuse to rent your property to them for any of those reasons. You are not allowed to ask questions about any of those factors in your application or interview. If someone feels their civil rights have been violated, you may find yourself in court. While you may be able to prove that you did not discriminate against them, you will spend time and money defending yourself. It is important that you understand the fair housing laws before you begin renting your property. You want to make sure you keep clear and accurate records. You want to keep copies of everything and follow consistent business practices. If you are consistent with everyone, then you cannot be found guilty of treating any of your tenants differently from the others. Keep records of everything, even if you think it is not important.
Step 2: Always have the proper insurance on the property. You want to make sure you have the proper amount of liability insurance. This may protect you in the long run. You want to make sure that your entire property is safe at all times. If a crime takes place on your property, you could be found at fault for it. You want to make sure that the property is as safe as possible. You want to make sure that your property is accessible to everyone, including those with disabilities. If your tenant has an accommodation request, you should consider complying with it. These requests can be reviewed case by case, but you should grant it if it is reasonable. This could include wheelchair ramps, shower grab bars, proper locks, and sufficient lighting outside. When a tenant requests to have something fixed in the house or on the property, you should respond immediately. Another way to ensure the safety of your tenants is to require them to report any leaks or damage in the house immediately so that you can repair them. If leaks are left unaddressed, there is an opportunity for mold to form and grow. You want to make sure your house has carbon monoxide detectors. All of the appliances in the house should be maintained and replaced as needed. You should make sure that your buildings do not contain lead paint, radon, or other hazardous materials. If you find something in the home, you should alert the current tenants and keep them informed of the situation and the repairs.
Step 3: No matter how well you try to maintain the relationship with your tenant, the situation may not be a good one. When you work to have a good relationship with your tenant, it could save you many headaches in the end. Sometimes, things are easier when you are on friendly terms. As unfortunate as it might be, there could come a time when you have to evict someone. It could be because of something the tenant did or did not do, such as a breach of lease. It also may not be any fault of their own. Either way, you have to follow the proper procedure for eviction. You must supply notification and a sufficient amount of time. If you do not follow the process, your tenant can sue you for damages. You must know and understand the laws of the state and city in which you are renting property. Always respect the privacy of your tenant, even if you are planning to evict them. You must provide proper notification, which gives 24-hour notice that you want to enter the property. You must remember that your tenant has rights, and you cannot violate them.
