While lawmakers are looking for ways to accommodate more renters, like California’s new push to license in-law suites, many property owners are taking advantage of the hot market and renting out their homes rather than selling.
And that means more people are becoming landlords — many of them for the first time. To be successful, they will need to learn how to find the right tenants and reduce liabilities — and come up to speed quickly. That means employing the same strategies as the pros:
New landlords often begin their tenure by trying to be their tenant’s friend. They’re nice, laid-back, easygoing. It’s surprising how many times that comes back to bite them. What inexperienced landlords perceive as benevolence, some tenants see as an opportunity to walk all over this newbie. The landlord loses control, and the tenant takes advantage.
Tenants do not have to like their landlord — they need to respect the landlord. That results from professionalism. No emotion, no conciliation, no hanging out and having a beer. Tenants shouldn’t be afraid of their landlord, but they should be mindful of who’s in charge.
Forget About the Ideal Tenant
Looking for a specific type of tenant? That’s a common mistake of first-time landlords. When advertising for a tenant, there should be no preconception of that person’s individual characteristics other than the qualifications for the rental — sufficient income, decent credit, and good rental history.
Imagining the perfect tenant is like putting a target on your back. Problem tenants know the drill: dress the part, tell a good story, wave around some cash or use a fake reference, and avoid a tenant background check. Then, the tenant can live rent free while the new landlord learns all the ins and outs of eviction court.
Experienced landlords know not to overdo it when it comes to sinking money into designer touches. Many new landlords are leasing out their own homes. It often comes as a shock when a tenant doesn’t want to dote on the property or doesn’t appreciate the fancy details. No tenant is going to care for a rental as well as the owner — the one who suffered through weeks of renovations to get exactly what they wanted.
Landlords only can recoup damage a tenant causes, not the wear of ordinary use. The house is not going to look the same when the landlord-owner takes it back. So, be prepared.
Because wear and tear is not the tenant’s problem, landlords should avoid finishes that won’t stand up, or waste investment money with magazine-worthy designs. Keep it neutral, tough, and easy to clean — unless you want to remodel every time a tenant scuffs the floor or leaves a water ring on the countertop.
Safety is Key
Landlord liabilities revolve around tenant safety. Features like carbon monoxide and smoke detectors are inexpensive, prevent injuries or death — and the resulting lawsuits, and often are mandated by law. Deadbolt locks are a must-have. Clear pathways and lighting around parking areas prevent injuries and crime.
In addition to providing reasonable safety features, landlords must frequently inspect the property and make repairs to ensure that those features remain in good working order.
New landlords who are relocating a significant distance away and renting out their previous homes are at great risk for income loss. Renting “absentee” is not a viable option. Tenants who are put in charge of caring for the property alone — supervising repairs, doing all the maintenance, solving disputes — are notorious for causing property damage and defaulting on rent.
The best solution for long-distance landlords is contracting with a local property management company to oversee day-to-day issues, perform periodic inspections, and keep the property in good repair for the duration of the tenancy.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.