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As a landlord, there may be local laws with which you need to comply. Check with your city or town to see what rules and regulations are in place for individuals that rent out property to others. For example, you may need a business license, rental license, or a zoning officer may need to inspect your property to ensure it is up to code. It is also a good idea to check with your mortgage company, as some may have stipulations if the property is going to be used as a rental.
To learn about some laws that may be applicable to your property, view our list of state tenant laws.
As a landlord, you typically need greater protection in certain areas that homeowners may not. For example, landlords often require greater liability protection against injury claims or property damage. Allstate's Landlord Package Policy Insurance includes liability protection to help cover damages that you might be obligated to pay. In addition, if you're sued due to a covered loss, Allstate steps in to provide legal counsel to defend you.
An important protection that Allstate Landlord Package Policy Insurance offers is Fair Rental Income, which helps protect you if your property becomes uninhabitable. Under any covered loss, you're covered for the rental income you would have received from your tenants for as long as it takes to replace or repair your rental unit, up to 12 months.
You may also want to consider adding optional coverages to your landlord policy to ensure you are adequately protected in case of loss. For example, burglary, vandalism, and building code coverage can be a wise investment to better protect your property.
Rental prices are primarily market-driven, so the first step in determining how much to charge for rent is to look at the monthly cost of comparable properties in the area. For example, rental property in a popular neighborhood will generally have a higher rent than a property of similar size in a less desirable location.
Here are some tips to help determine a fair monthly rent:
Keep in mind the economy, local housing market, location, and property condition can also impact what is considered fair market rent.
Other factors to consider when determining what to charge include square footage, number of bedrooms, number of bathrooms, and size of yard/lot. Don't forget to take into consideration the costs that you as the owner will incur, and determine upfront what the tenant will be required to pay. These costs can include homeowners association fees (if applicable), water and trash, landscaping, utilities, or your annual property insurance premium. If you plan to cover the cost of these items, you may want to increase your monthly rent amount to avoid paying out of pocket.
Taking the necessary steps to keep your rental property safe is not only beneficial to your tenants, but it also protects you as the landlord. If your rental property is not up to safety standards, you could run into legal issues and even lost rental income. To protect you and your tenants, keep your property safe by taking preventative measures and following basic safety tips, including:
You may want to consider obtaining background checks and gather references during the application process. It is also smart to check with past apartments and rental houses to see if there were any incidences of damaged property or other red flags.
It is a very good idea to require renters insurance, as it better protects both you and your tenant. Renters insurance typically helps protect your tenants' personal belongings and liability protection in case a guest is injured in their unit. With renters insurance, your tenants are better protected, and may be less likely to sue if an accident occurs. But, keep in mind that in most cases, landlords insurance does not cover your tenants' personal property.
First and foremost, always get everything in writing. Your rental agreement should specify exactly what each party is responsible for in terms of payment and maintenance. Also, be sure to include guidelines around situations that involve breaking the lease or if you need to sell the property while it is still being rented.
Check out our list of rental agreement templates to get you started, including rental applications, move-in forms, and maintenance checklists.
It's important to check in from time to time to make sure there are no maintenance issues and that your property is being properly taken care of. Good landlords are quick to respond to repair requests and stay on top of regular maintenance to avoid serious problems. Checking in with the neighbors is also a good way to make sure there are no major issues with your tenants or property.
While every landlord hopes for great tenants, sometimes situations arise involving late rent payments, neighbor complaints, or damage to the property. To stay on top of these problems, visit the property regularly (but give proper notice to the tenant) and speak with the neighbors to gauge the situation.
To protect yourself against future issues with the tenant, make sure you keep an adequate record of communication, maintenance visits, and financial transactions. Ensure all rules are clearly written in the lease so the tenant is aware of the property rules and regulations before moving in.
As problems with difficult tenants arise, be sure to communicate concerns clearly and give warnings when applicable. If the problem is late or missed rent payments, based on the guidelines set out in your lease, you may be able to evict the tenant after a certain amount of time. Of course, consult your local regulations before taking any action.
Reacting appropriately to problem situations is important, but it is best to do your due diligence to avoid difficult tenants altogether. Before signing a rental agreement, do a thorough background check to determine credit, employment, criminal, and rental history.
Generally, repairs, taxes, mortgage interest, and insurances are tax deductible, according to Zillow. Make sure any money you spend on your rental property is documented, whether it's repairs, upgrades, or purchases. To find out exactly which expenses you can write off, contact your tax professional.
Every state is different and has unique rules for eviction procedures and paperwork. Common reasons for evictions are:
In many states, before you can evict a tenant, you must give notice of minor infractions. This notice requests the tenant to correct the problem or vacate the property. Depending on the reason for attempting eviction and the state you are in, you are required to give notice a certain amount of time in advance. Make sure to get a copy of your state's eviction rules and regulations.
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