A growing portion of the population — nearly 39 million households — are choosing to rent rather than own their corporate homes, according to the Joint Center for Housing Studies of Harvard University.
If you are a homeowner who suddenly finds yourself in the unfamiliar role of landlord — perhaps you need to relocate quickly for a new job or you inherited a corporate home — the good news is that demand for rental properties is expected to remain strong. But even with a strong market, you may be feeling uneasy over all the responsibilities that come with renting out a corporate property. You will need to find a suitable tenant, maintain the property and ensure you follow all legal guidelines.
While a fresh coat of paint, manicured lawn, new carpeting and available parking can all help you market your property to potential tenants, those are the easy steps. If you are about to be a landlord for the first time, it’s important to understand the legalities of renting before you ever place that first advertisement.
It’s important for your tenants to feel safe and that you have peace of mind while your home is empty or in someone else’s care. Keep your home well-lit and have updated locks installed before the new tenants move in. Having an alarm and security system installed is the best way to make sure your home is safe from break-ins.
While the alarm system can keep your home secure, you should change the alarm code every couple of months. If you get new tenants or they give out the security code, you don’t want someone getting into the house who shouldn’t be there. Also, always change the locks after a tenant moves out.
Tenant Screening and the Law
Securing suitable tenants is probably the biggest hurdle a new landlord faces. Unless you have past experience in property management, you are probably concerned about ways to legally ascertain that a prospective tenant is able to afford monthly rent payments, will not damage your property, has a clean criminal background and is not a substance abuser, among other considerations. Luckily, there are numerous resources available to help. For example, the American Apartment Owners Association can provide information and resources on screening prospective tenants when you click here.
Before screening tenants, become familiar with regulations designed to prevent discrimination in housing to determine which apply to your circumstances. These laws relate to everything from skin color to disabilities. The U.S. Department of Housing and Urban Development is an excellent resource for reviewing applicable laws.
Check into your state’s housing regulations in case there are additional requirements you must follow. The law school at Cornell University is another excellent source for reviewing both federal and state requirements that impact landlords and tenants. For example, your screening process cannot ask questions about race, gender or religion, even in subtle ways.
Asses Your Capabilities
If you have suddenly become a landlord because you needed to relocate quickly for a new job and were unable to sell your house fast enough, your decision to take on the role of active landlord will depend a great deal on whether you have located across town or across the country.
Make no mistake about it; it is difficult to be an absentee landlord. A problem at your property could pop up at anytime, whether it is a plumbing or electrical issue, damage from storm or a non-paying tenant. It also becomes difficult to check on the condition of your property periodically when you live and work hours away. If your relocation takes you out of town, you will want to rely on a handful of trusted repair professionals — such as a plumber, electrician and lawn care specialist — to assist you. You may also want to ask a trusted former neighbor to alert you over any visible concerns about the property’s condition, as long as the person understands they should be observant without seeming intrusive.
Consider Professional Assistance
Even if you are staying within an easy driving distance of the property, do you have the time and temperament to take on the day-to-day task of landlord, along with your other responsibilities? Your local real estate licensing agency should be able to put you in touch with professional property managers who can take a lot of the headache out of the process for a fee.
If you decide you want to leave the day-to-day responsibilities to a professional, begin by determining your expected costs and estimated income, then shop around for a competent property manager at a price that fits your budget. You can hire someone to take over the entire process for you, including marketing the property and screening tenants, or choose to have someone take over once you have found a suitable tenant.