The All-Inclusive Guide for Becoming a Landlord
Wanting to become a Landlord?
EveryHouse has you covered.
Whether it's your first foray into being a landlord or you're a seasoned property investor, EveryHouse has seen and dealt with more property ownership situations than you can shake a stick at. Get more info to help you grow your business the best way possible.
Becoming or being a landlord can be a bit of an adventure with countless twists and turns, so the team at EveryHouse has put together a full write-up on how to be the best possible landlord for yourself and your tenants.
Are you interested in becoming a landlord? You’re not alone! There are many people who want to rent their property out and make some money on the side. It’s important to know what it takes before you sign up, though. In this post, we’ll go over all of the steps that will help you become a landlord, including how much money landlords make yearly, what type of qualifications they should have for renting properties, and more.
What is a Landlord?
A landlord is someone who rents their home or property out to other people. Landlords can be an individual, a corporation, charitable organization and more. It’s important that you do your research before deciding whether this job will suit you!
What does it take to become a landlord?
To qualify as a landlord, there are certain qualifications they must meet:
- At least two years’ worth of savings if renting investment properties – five months if only renting to specific types of tenants
- The landlord must have a steady monthly income
- A good credit score of at least 700 or higher, and no bankruptcies on their record within the past decade
- They need to be financially stable enough to handle emergencies with budgeting and planning for things like broken pipes or roof leaks
- A landlord should have at least three years of experience in the real estate business
- The individual needs to understand how to manage money effectively with budgeting and planning for emergencies like broken pipes or roof leaks
What is the financial investment to become a landlord with rental housing?
The average person will spend well over $50,000 in some cases when becoming a landlord. But don’t let that deter you! Landlords can make up to $4400 per month by renting out just one single unit – not even counting any other properties they may own! So it isn’t as hard as it sounds. You just might need help from family members if you’re looking into starting your business alone without many resources.
Landlord real estate is all about the details and understanding what’s involved with making this type of money-making investment work for everyone involved
There are plenty of additional expenses like: attorney fees, insurance, property taxes, utilities (gas/electricity), homeowner’s association dues or condo HOA fees, and multiple other factors to consider when becoming a landlord.
In addition to the up front costs, there are also ongoing expenses and maintenance that can pop up unexpectedly – which is another reason why you want to be prepared with as much knowledge of your investment before jumping in! If these numbers seem daunting or overwhelming, don’t worry. We’re going to break everything down so it’s clear for anyone who wants to get into this business opportunity.
What are the obligations that come with being a landlord?
A good landlord is someone who ensures that every tenant has a place to live in safety and comfort!
- Do extensive research on possible apartment complexes, take time to make the right decision for you and your family.
- Don’t forget about the financial aspect of becoming a landlord: how much will this cost? What are all my obligations as landlord? Who covers repairs if something goes wrong with one of my tenants’ leases? Where will I get money if rent isn’t paid or there’s an emergency situation requiring action from me, such as nonpayment by utility company which leaves unpaid bill balance owed to electric/gas service provider?
- Collecting rent on time every month.
- Making sure the property is kept up to code and in a habitable condition – even if that means hiring professional help or paying for repairs out of pocket.
- Remaining calm when management issues arise, like an angry tenant who wants their security deposit refunded because they damaged your walls with graffiti while moving out! (The key here is having solid documentation so you can take appropriate action.)
It’s also important to recognize what YOU are getting into before stepping into this role as landlord: most importantly, being responsible for other people’s safety and happiness! This can be stressful sometimes but it will all be worth it knowing that you’re providing your tenants with safe housing no matter what the circumstances are.
Landlord and Tenant Relationships: How do they work?
You’ll need to be as clear and straightforward about what the responsibilities of your tenant are in order for them not to have any confusion. You may even want these expectations outlined in detail within the lease agreement so that there is no room for misunderstanding on either side!
Landlords should always protect themselves financially by having renters sign leases which spell out specific terms such as how long they’re renting, rental agreements, and when rent is due.
Tenants need a place they can call their own, so make sure that you are as accommodating and understanding while still being firm about your expectations for them.
If there’s an issue with the property such as squeaky floors or broken windows, be upfront in letting tenants know what it will take to fix any issues before signing on the dotted line!
You don’t want to go through all this work only for someone else not following through on what needs to happen. They’ll thank you later!
State Law, Housing Laws, and Landlord Tenant Law
It’s critically important that you are aware of all state, housing, and landlord tenant laws when beginning your landlord venture. Failure to do so may lead you into some sticky legal situations.
To ensure that your relationship with tenants is as smooth and worry-free as possible, it’s important that you are aware of any landlord tenant laws in the state where you plan on renting out property.
If a tenant fails to pay rent or damages the property beyond normal wear and tear, for example, there are steps you can take legally according to these specific rules which will help protect your investment.
The state housing department website should be an invaluable resource when looking up guidance for this type of thing!
You’ll also want to consult local law enforcement experts who specialize in landlord-tenant disputes; they’re more than happy to offer their advice about what constitutes illegal activity.
State Statutes and Lease Agreements
As a landlord, it is your responsibility to know what the rental market looks like in your state.
There may be laws that are set into place which you can follow to protect yourself as a landlord and also help avoid disputes with tenants when they inevitably arise.
For example, if you plan on renting out a home or apartment in California, there is likely going to be something in your lease agreement about tenant repairs (to replace anything that wears out) – this is called normal wear and tear.
Landlord and Tenant Rights
It’s important for both landlords and tenants to understand their rights within these agreements so everyone has an equal chance at understanding the expectations of them!
Having an iron-clad lease agreement is a great way to make sure you’re in compliance with landlord tenant law, state laws, and that your lease agreement will stand up in a court of law, should complications arise in the rental process.
The Landlord Tenant Relationship
Make sure that your landlord tenant relationship is a partnership, not a dictatorship. This will help you with your tenant turnover and in the long run save you money.
There are a few things that landlords should not include in tenant leases, including:
- Requiring tenants to pay for utilities (e.g., water)
- Restricting tenants from having roommates or pets
- Giving landlord access to rooms without notice (e.g., bedrooms)
If your lease agreement contains any of these items, it is important that you discuss them with your lawyer before signing on the dotted line! Landlord/tenant law can be pretty complicated so make sure you know what’s coming if you’re going to get into this business as an investor! You don’t want to set yourself up for failure later down the road because of something that you passed on as an oversight.
In most states, landlords have the right to enter their properties for a few reasons.
- Serving an eviction lawsuit against tenants if they are violating lease agreements;
- Inspecting the property annually and within 24 hours of receiving notice from a government agency that says there is hazardous waste or environmental contamination on the landlord’s real estate;
- To make repairs or improvements which tenant has refused to allow in writing. Landlords also can not abuse these rights by entering without cause or with excessive frequency (e.g., more than once per week). A violation may result in fines and penalties levied against landlord!
Rent Payments, Times and Fair Notice
When it comes to rent payments, you’re going to want to be extra careful. In addition to being sure that your tenant has a good job and steady income, you’ll want them to have the means necessary for making rent payments on time.
Various sources recommend different amounts as appropriate, but many agree that one month’s worth of rent should suffice in order to avoid late fees or eviction notices from landlords!
Remember: Each Tenant/Party Will Be Different
When it comes to being a landlord, not every tenant will be the same. For example, some tenants will be very quiet and never cause any disturbances whatsoever. Others, however, may have friends who decide to come over without asking first.
Some landlords are okay with this behavior – but others aren’t! To avoid having problems in your rental property because of unexpected visitors or noise complaints, it would be wise to learn a little bit about each tenant before signing the lease agreement.
- The Tenant With The Pets Is Allowed To Keep Them?
- Does Your Property Allow Smoking On Premises?
- What About Parties Involving Alcohol?
Remember that when you’re speaking with prospective tenants, they’ll want answers to all these questions so they can make an informed decision about which landlord is right for them!
Property Owners vs Landlord: What’s the Difference?
The main difference between property owners and landlords is that property owners own the home and land, while landlords are only responsible for renting out that space.
The Responsibilities Of A Landlord:
- Coordinating with renters about renovations to the rental property
- Collecting rent payments from tenants on time each month
- Maintaining a clean and safe living environment for all of one’s tenants (this includes addressing repairs or other issues promptly)
- Making sure that everyone who lives in the unit is abiding by your rules as landlord
The Responsibilities of a Property Owner:
- Deciding which type of property to purchase
- Negotiating a price with the seller
- Paying for all loan and mortgage payments each month (along with other expenses like insurance)
The Importance Of Protections In A Lease:
One of the main responsibilities of landlords is ensuring that tenants are abiding by their lease. This means taking steps to ensure that they’re following any rules, paying rent on time, not damaging or stealing from your property, etc. Tenants who don’t follow these guidelines can be evicted at any given point. To avoid this situation as landlord, it’s important to include protections in your lease agreement so you know what behaviors warrant an eviction notice!