6 Things to Know Before You Become a Landlord
As the housing market continues to recover, you may hear about renting mavens who capitalize on the increasing rental market. Renting can be a great way to make some extra income, but it’s important to consider the appropriate preparations before you get on board. If you are thinking about renting out your home, here are some tips to consider.
1. Know the Laws
Not every state operates with the same landlord and tenant laws so be sure you know the laws that will govern your property before listing it. Your neighborhood may also have rules about rentals. Not only is your responsibility a huge obligation, but there are legal implications involved in becoming a landlord. It’s a good idea to study up on your rights and what you can or cannot demand from your tenant, including when you can legally enter the home. (Also keep in mind that federal housing law prohibits discrimination based on race, color, national origin, religion, sex, disability and family status — such as whether children will live in the home.)
2. Create a Contract
A simple lease drawn up with the accurate legal jargon can go a long way toward protecting you. It’s a good idea to have every adult who will be living in the home sign the document before moving into the rental. The lease should include details about the length of the rental term, security deposit, due dates for rent, maintenance responsibilities, rules of behavior and eviction terms. This can save you thousands in court fees in case something goes wrong. It’s also a good idea to make sure you have the numbers of emergency contacts for your tenant.