Nolo's Landlord Bundle
Nolo's Landlord Bundle
Should I hire a property management company?
Especially if you own multiple rental properties and aren’t close by, you’re smart to consider hiring a management company to handle day-to-day matters. A manager can help you:
- Collect rent payments
- Handle routine maintenance and emergency repairs
- Post ads for rental units
- Show prospective tenants around and screen tenants
Delegating these tasks lets you focus on your day job or other aspects of your rental property business, such as looking for new properties. You’ll probably need to pay a fee of from five to 10 percent of what you collect in rent. And by contracting with a company instead of hiring an individual as a property manager, you don’t take on the responsibility of being an employer.
What expenses can I deduct as a landlord?
Landlords can take advantage of a lot of income tax deductions. Here are just a few of the big ones:
- Mortgage interest
- Depreciation on rental buildings
- Travel expenses—for example, driving to the rental property
- Fees for lawyers, tax preparers, and other professionals
Where do I get a lease form to have tenants sign?
Using a lease or rental agreement that doesn’t comply with state and federal law get you into legal trouble. Many so-called "standard" forms that are sold everywhere don’t give tenants the rights they’re entitled to under individual states’ laws. And some standard forms actually impose greater obligations and restrictions on landlords than state law does! So make sure you know that your lease or rental agreement, like those offered by Nolo, is up to date on landlord-tenant laws in your state.
I’d rather not have kids or pets in my rental units. Can prohibit them?
It is absolutely illegal to discriminate against families. Despite that, many landlords are far from family-friendly -- and some of their practices may be illegal. Excluding families because you think children cause more wear and tear and you prefer a "mature, quiet" environment is illegal. And although you're permitted to limit the number of residents in a unit (in most situations, two occupants per bedroom), you may not apply that standard differently when dealing with families. The cost of this mistake can be a trip to your lawyer's office to deal with a fair housing complaint.
You can, however prohibit pets (although many landlords prefer to allow them, because it helps them find appreciative, long-term tenants). But if you allow a tenant to have a pet, in violation of a no-pets clause in the lease, you can’t later try to enforce the no-pets provision.
If tenants damage the property, can I keep the security deposit?
You bet—but you need to do it right. Every state has very detailed laws on how landlords must handle security deposits. After all, it’s someone else’s money, at least until the tenants have done something that gives you the right to keep it.
Arguments over security deposits are one of the most frequent types of cases heard in small claims court. But the basic rule for landlords isn't hard to understand: Deposits can be used only to cover needed cleaning, unpaid rent, and damage beyond wear and tear. Still, landlords routinely use the deposit to cover appliance upgrades, cosmetic improvements, and other refurbishing. Not surprisingly, many of these landlords lose in small claims court.
Deposits must also be returned according to state law. Many states have deadlines by which landlords must itemize their use of the deposit and return any balance to the former tenant. It's not uncommon for tenants to wait many weeks or months for this accounting. In some states, a landlord who deliberately (in bad faith) keeps the deposit may be ordered to pay two or three times the deposit to the tenant.