The last few years have been good for landlords and the rental property industry. With foreclosures all over the nation, demand for rental units has soared. Prospective buyers are finding potential rental properties are being sold at a much lower price than before. With depressed home prices and a need for more rental properties, now is the time to become a landlord.
Nevertheless, many new landlords still express the same two fears when it comes to tenants: damage to the property and failure to pay rent. While this may be a reality for some landlords, it shouldn’t deter you from becoming a rental property owner.
These days the state of California has rules and regulations to help both tenant and landlord when issues arise. Fortunately for the landlord, if the tenant causes destruction to your unit or refuses to pay rent, small claims may be on your side.
Obviously there are some factors beyond your control as a landlord, but it is possible to mitigate potential losses. You can’t know what a tenant does inside the home, so make sure to put prospective tenants through a thorough background, credit, and reference check.
One way to do this is by hiring a property management company to take care of the tenant screening process for you. Property managers are professionals in the rental property industry and deliver qualified, reliable tenants. Owning rental property is a business and a source of income, so use the best to find the best.
Another aspect, which will help remove the fear of renting out your property, is the security deposit. According to the California Department of Consumer Affairs, the landlord may use a tenant’s security deposit for four purposes:
- For unpaid rent;
- For cleaning the rental unit when the tenant moves out, but only to make the unit as clean as it was when the tenant first moved in;
- For repair of damages, other than normal wear and tear, caused by the tenant or tenant’s guest; and
- If the lease or rental agreement allows it, for the cost of restoring or replacing furniture, furnishings, or other items of personal property (including keys), other than because of normal wear and tear.
Lastly, a big concern for new landlords is a tenant’s failure to pay rent. This is a major fear for owners because they have mortgages to pay. If owners don’t get the rent, it’s going to be a difficult month. It all boils down to finding a qualified tenant who has legitimate qualifications to help you sleep at night.
A sure way to eliminate all worries is to hire a property management company, like Real Estate Connections in Los Gatos, CA, to oversee these aspects for you. This ensures that if you come across a tenant who refuses to pay rent, there is a person on your side with thorough knowledge on how to handle the eviction process. Evictions can cost anywhere from $600 to $1,000, but by paying a property manager a small fee per month, they will properly sort out the matter.
Landlord-tenant issues are a common occurrence in the rental industry, but these problems can be avoided as long as both parties fulfill their responsibilities. Don’t let fear keep you from making a smart investment in your future.
If you have any questions, feel free to contact us.