3 Of The Worst Mistakes Landlords Can Make

With the real estate market being so low, many individuals are purchasing properties left and right to use as rentals. While this might seem like a lucrative opportunity, it isn't exactly going to be in your best interest if you don't know what you are doing. Being inexperienced in real estate law could end up costing you dearly. Avoid making one of these common mistakes when renting a piece of property.

1. Make sure you have some type of lease written up.

All too often, landlords rent their property with nothing more than an oral agreement. With laws favoring tenants, you need something written up that outlines the terms of the lease. Even though you can often find a form lease online, that doesn't mean it is going to outline everything pertaining to your specific situation. Seeking assistance from an attorney in drafting this document can save you a lot of time and hassles down the road.

2. Don't forget to collect a deposit and document it properly in the lease.

Make sure you collect a deposit equal to a month's worth of rent. Throughout the terms of the tenancy, the deposit should remain at the bank in one of their interest-bearing accounts. Once the tenant leaves, the deposit needs to be refunded to them, unless you have to repair any damage to the property. Unless the lease specifically says you can withhold the deposit for past due rent, you have to return it to them.

3. Check into any prospective tenant's background.

Go through and look to see whether the tenant has ever been party to an eviction proceeding. Individuals with evictions on their records are often unable to rent from a large corporation. Because of this, they look for private landlords who don't perform all of the necessary inspections into their background. A tenant who has been evicted from a previous rental due to non-payment of rent is far more likely to do the same thing to you than someone who hasn't. While there are other reasons for evictions beyond non-payment of rent, delinquent payments tend to be the most common.

By taking the time to go through everything thoroughly before renting your property, you can prevent a bunch of hassle and heartache down the road. Speaking with an attorney about what you need to do can help to simplify the rental process and make sure you aren't taken advantage of during the tenancy.

If you need more help and have other questions, contact a company like Schulze Howard & Cox to learn more.

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