If you own spare property, letting tenants rent the space can be an effective way of increasing your earnings. Yet, property rentals are often more complicated that individuals would have expected. When a person makes mistakes while renting to a tenant, it can lead to costly disputes. Protecting yourself against the more frequently encountered rental issues can be as simple as following basic safe rental practices.
Always Conduct A Thorough Background Check
Renting the property to a bad tenant can be a troublesome and costly experience. In addition to the fees that will have to be paid to evict the tenant, you may also find that they have caused considerable damage to the property. Performing a thorough background check can be an excellent way of screening for individuals with a history of nonpayment or destruction to rental units. While a credit check can help to catch many of these issues, you may also want to speak with the prospective tenant's previous landlords or other references to give you a better idea of what to expect.
Have Your Lease Professionally Prepared
There are many internet services that will allow you to easily and quickly have a lease contract prepared. Unfortunately, this can be a poor substitute for a professionally prepared lease. If you retain an attorney to prepare these documents, you can rest assured that this professional will have a thorough understanding of the local rental laws and protections so that your lease will provide you with the most protection possible against liabilities and bad tenants. Ideally, you should have your lease reviewed and updated each year so that it will reflect any changes in the laws that may have occurred.
Keep A Separate Account For Emergency Repair Funds
It is a reality that the building or unit you are renting will experience problems. When a rental unit is experiencing malfunctions or needs repairs, the landlord will be obligated to make timely repairs to the unit. Failing to do this can cause the tenant's lease to become void, and you might also be fined or sued. Sadly, individuals that are new to renting will often be poorly prepared to make these repairs as they may not have the money available to cover the costs. To prevent yourself from getting caught in this type of predicament, you should keep an account that is exclusively for repairs. In addition to helping ensure that you have the money available for any necessary repairs, you may also find that it is easier to document any repair costs when it comes times to declare them on your taxes.
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