If you are looking to invest in real estate, or if you are wondering about renting out a property that you are already invested in, there are a lot of things that you should know before you make either of these decisions. Here is a quick breakdown of things that you should know about before investing in a rental property.
You can’t charge more in rent than what the property is worth
This should be something that is already in your mind, but if it isn’t, you can’t expect any renters to pay you more than what the property is worth. If the home is in good condition, you can charge a fair price for it, but if the property has an estimated monthly value, you aren’t allowed to go over that much when asking your tenants to pay rent.
If you need to evict someone from your home, you’ll need a good reason
Due to the legal work that is involved with owning and renting out a property, even if it is short-term rentals, evicting someone can cause a lot of problems for you. If you don’t have a valid reason to evict someone from your property, they will gain squatters rights. If you are unsure of what that is, you will need to read up on the guidelines before considering getting involved with a rental property.
You aren’t allowed to discriminate
No matter how you might feel personally about where a person comes from, what they look like, or how they live their lives, you are not allowed to tell someone that they cannot rent your property if there is not a valid reason for it. If they don’t have the proper income, if there are too many tenants for the property size, or if they have a pet and you don’t allow animals, then you are allowed to say no. But you can’t legally discriminate when it comes to renting out a property.
You are legally required to have a lease or document that discusses the rental agreements
If you want to rent out any property that you own, or if you want to bring someone into the home that you are currently the manager of, you have to make sure that there is a legal document that puts that person in that home. If you don’t have these things written out, the person can bring up squatters’ rights when it is time for them to move out. Along with this, they won’t be required to pay you if there is no documentation that says they have to.
You are responsible for making the home a safe and livable location
If you have a livable home, you can rest easy knowing that your rent will come in every month on time. However, if something in the home breaks, it is up to you to fix it. If the broken item causes issues for the tenant, they don’t have to pay rent until the problem is fixed. This is unless the problem is only relevant for a single day and fixed immediately.
You are allowed to add fine print to your lease
Despite discrimination being against the law, you are allowed to add in fine print to your lease agreement that will thin out the crowd of tenants that you are dealing with. If you don’t want pets ruining your property, add in a line that says that they aren’t allowed. If you are worried about the tenants skipping rent, add in a detail that says if you miss a month, the tenant can be evicted from the property. These are things that you are allowed to do, so take advantage of them.
You are allowed to ask for a deposit, but there’s a limit to how much you can charge
If you want a deposit just to assure yourself that the tenants aren’t going to ruin your property while renting, you are allowed to ask for one. However, you can’t ask for a deposit that costs more than the first month’s rent. If you ask for more than two months of rent in the deposit, the tenant can file a complaint about it and get you to lower it. If you don’t, your property will not be something that can be rented.