Are You Prepared to Be a Landlord?

A new year is on its way! If you’re reading this, odds are that you’re considering purchasing a rental property and becoming a landlord. Are You Prepared to Be a Landlord? Before you dive too deep, have you considered the following?

Insurance
If you’re planning on purchasing a rental property, you need property protection. Most forms of property insurance will cover the dwelling and items associated with servicing it. This means that if a tenant backs his truck up into your lawnmower, for example, the damage to the lawnmower will be covered. Most plans are subject to deductibles and limits.

Liability insurance is also non-negotiable, particularly if you don’t plan to live on-site. What if a step on the stairs comes loose and your tenant falls and injures themselves? Without liability insurance, you could be on the hook for legal and medical expenses.

It’s important to note that homeowners’ insurance does not typically cover your tenants’ belongings. Will you require tenants to purchase renters’ insurance so they’re covered in the event of a fire, flood, or another disaster?

Laws
There are a boatload of laws surrounding landlording! One of the best known is the Fair Housing Act, which prohibits discrimination due to race, color, national origin, religion, sex, familial status, or disability. Fail to follow the law and you could find yourself with a lawsuit on your hands – not something anyone wants! You can find more information here.

The Difference Between Pets and Service Animals
As a landlord, you can say “no pets” in your lease agreement. However, if your tenant is or becomes disabled and requires a service animal, you legally must allow it. Since service animals perform services that benefit a person with a disability, the animal is considered a “reasonable accommodation.” Denying the use of the service animal would fall under discrimination. Keep in mind that an emotional support animal is often also protected under the American’s with Disabilities Act if it provides service to a disabled person.

Best Business Practices
It’s critical to consider your why for becoming a landlord.

Is it all about money? In that case, consider what the ROI of a renovation might be before jumping in headfirst. Also, keep in mind that expenses can add up in older homes as things break.

Are you thinking about long term appreciation and resale value? If this is the case, you may not be as concerned about earning rents that cover all expenses in the short term.

At minimum, you must consider the expenses to own and service a rental property, how to market a vacant unit, and what your plan of action will be for difficult tenants and issues like mold or pests.

If you feel you’ve thought through it all, I’m happy to walk you through the process and guide you through any steps you may have missed.

Are you interested in buying or selling a home? Contact us today at 713-364-5883 or info@angelfultzrealty.com.