According to Census data estimates, individual investors own approximately 70 percent of all rental properties in the U.S.
Are you one of many new landlords getting into the investment property game? Or do you need a refresher on some of the common lease violations?
Leasing out properties can have both legal and practical complications making it a little trickier than it might seem.
Renting that first property is an exciting moment for any new landlord. Keep reading as we explore some of the common rental leasing mistakes. We'll also share ways to avoid them.
1. Not Setting Non-Discriminatory Eligibility Standards
The Fair Housing Act prohibits landlords from discriminating against applicants when screening tenants. A landlord or tenant placing company may not discriminate based on race, color, national origin, religion, gender, familial status, and disability.
The landlord has the right to establish minimum criteria for the application and selection process, but these cannot be discriminatory based on those attributes listed above.
The criteria may include things like a minimum credit score, verifiable income, eviction and rental history, and income-to-rent ratios.
It's important to be consistent in the screening process to avoid discrimination claims.
2. Not Taking the Rental Inspections Seriously
As a landlord, it is extremely important to know the condition of your property before a new tenant moves in and after they move out.
This is not a part of the leasing process that you can take lightly. The main purpose of the move-in inspection is to have documentation of the property's condition at the time the new tenants move in.
Without this documentation or without a thorough inspection, the owner has no way to establish whether or not the condition of the property changed by the end of the lease. A move-out inspection will be useless at that point.
When done properly, the two inspections help the landlord determine whether or not to charge for damages and what should be written off as normal wear and tear.
3. Not Being Familiar With Local Requirements
It is important to stay abreast of all notice requirements of local rent control and just cause for eviction ordinances.
Depending on the city in which your property is located, it may have its own local notice requirements.
These laws are in place to prevent landlords from charging exorbitant amounts of rent, raising the rent disproportionately, or evicting tenants for the purpose of charging a higher rent to the new tenants.
If that sounds like a lot of legal mumbo jumbo, you may want to consult an attorney to find out with which local laws and requirements you need to comply.
Rental Leasing Done Right
Now that you know the rental leasing mistakes to avoid, you'll go into your first lease with confidence.
If you're still not feeling like you have the skills to take on the challenge, Property Management Inc. Jacksonville is ready to help.
PMI Jacksonville is a full-service real estate asset management company. We are dedicated to providing our clients with the best customer service to maximize owner profitability.
Contact us at 904-330-4475 or send us a message to set up a consultation.