What should you know about being a landlord? A landlord needs to be up to speed on good property management, which ensuring that all municipal property codes and tenant safety and security requirements are met. It also means having a good, clearly understood lease.
Becoming a landlord can be a very lucrative investment and rewarding experience if you play your cards right and prepare yourself in advance for the challenges that await you.
Gary Knippa, a property management company owner with over 30 years of experience in the Real Estate field says that one of the first things you want to do is get yourself acclimated with all the laws, rules and regulations concerning owning and renting property. "First would be, to get access to your state's property codes. There is going to be a property code or landlord-tenant regulations that they are going want to get up the speed on. They are going to want to be clear on the safety and security items that are required for property for further municipality whatever the code requirements are there," he says. You should also keep in mind that many city, state, and local governments place restrictions on the amount of rent you can charge so make sure you check with the consumer affairs or housing services office in your jurisdiction to make yourself familiar with any rent control or affordable housing laws in your area.
If you live in (or are thinking about investing in) a property that is part of a homeowners association, condo association or co-op board, it is also very important to make sure that they allow rentals. Check the association's bylaws to see if renting is allowed and if so, what if any special rules concerning rentals need to be abided by. You will also need to know how to draw up a clear, concise binding lease agreement. "A copy of a good usable lease, either one that their attorney draws up or one that they can get access to, that clearly spells out expectations of both parties with the idea that if both parties know what is expected and what the rules are, it can be a good long range relationship," Knippa explains. A word of caution: be wary of generic pre-printed lease agreement forms that are often sold in office supply and stationary stores. Many of these leases do not contain certain legally required language or information, and can end up being thrown out of court as invalid later on down the road.
It is also very important to remember that being a landlord will require a great deal of your time, energy and money and a serious commitment will be needed form you in order to be successful. Knippa advises to "be prepared for the investment of time and emotion that goes into owning and managing property." While being a landlord will require a great deal of work on your part, you can learn some of the burden by hiring a professional property manager. They can handle such services as scheduling repairs, collecting rent and advertising vacancies, freeing up valuable time for you to focus on other things. Getting a property manager can also help you to avoid getting into awkward situations with your tenants. "One of the surprises, if you are an individual owner dealing with your own tenant, is the tendency is to become friends or buddies with the tenant and then when the tenant can't pay the rent, you tend to work with them, you tend to understand their situation. You know a stitch in time becomes nine. And then it just erodes to just a horrible situation. A professional property manager can nip that in the bud in a professional, diplomatic way rather than letting it fester," Knippa says.
