So you have decided to make some extra money by renting out your home in Burbank. Before making the leap, there are a few things you need to consider.
Renting Out Your Home – Initial Legal Issues & Costs
Landlord/Tenant Laws
Are you familiar with the landlord/tenant laws that can affect what you can and cannot do within the rental relationship? How about local health codes or Burbank or Los Angeles County licensing requirements for rental properties? Do you have to have carbon monoxide detectors or how many smoke detectors are required? When is rent due and what is the legal late fee? And then there is the question of security deposits: whose money is it and when does it need to be returned? How do you make a claim to be reimbursed for expenses incurred by the tenant?
As you can see, there is quite a bit to know about being a landlord in Burbank and many ways to put you and your investment property at risk by not following guidelines, rules, ordinances, and laws pertaining to rental properties. Before renting out your home, make sure you are familiar with the latest legal developments so that you can avoid costly mistakes.
Liability
Investors may be exposed to huge liability if there are any safety or housing law violations on the property. Talk with your insurance provider to make sure you have an investment property or landlord policy because a homeowner’s policy will not cover loss, damage or injury once you are no longer the primary resident in the home. You will need to plan spending three to seven hours to familiarize yourself with the various legal and insurance considerations before renting out your home.
Marketing
These days it isn’t hard to create free listings online with just a few clicks. However, are you using professional quality photos that show off your property’s best features to get your desired rental price? Are you reaching as many qualified tenants as you should be? Good property management companies have access to many listing sites that extend your reach and get your property in front of the best tenants. If you’re having trouble finding good tenants, they can also help address these issues with you.
Tenant Screening
Placing the wrong tenant in your home or investment property can be a nightmare. They put your property at risk in terms of damage, and they put your financial health at risk by skipping or being late with their rent payments. Don’t jeopardize your biggest investment and cut corners where it counts the most.
Leasing
Leases can be purchased online or at an office supply store for low prices ($30-$40). However, many of these leases are not compliant to your local laws, and expose you as a landlord to undue risk and liability. Use caution to ensure that you are not inadvertently violating renter’s rights by asking questions that may be unlawful as a landlord to ask. It is a good idea to have your lease reviewed by legal counsel to ensure the lease protects your rights as well as is compliant with your state’s laws. You will need to plan spending two to three hours finding a lease, as well as a few hundred dollars for an attorney to review your lease to ensure that it complies with state and local regulations. This is the one of the best ways to avoid legal issues later down the road.
Property Management
While it may make sense to try to save money and navigate this on your own, a good property manager has already developed policies and systems to address these issues. They can help reduce your liability by understanding the legal ramifications of renting out your investment property. They understand California landlord & tenant rights as well as Federal Fair Housing laws. Property managers often have an established set of vendors because they are trustworthy and often have negotiated volume rates for their services. In-house maintenance personnel have been vetted and hired for competence and customer service. Professional tenant screening reduces the risk of evictions and other risks that can come with placing bad tenants.
There are so many things a good property manager can be doing for you and your investment. Making sure that they are a good fit for you and your investments will allow you to get back to what’s important in life.
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