For Landlords
Step One: Search for good tenants!
There are many ways to find good tenants. Ask friends, family, co-workers if they know/recommend anyone. (*though we DO NOT recommend renting to family or good friends directly... more times than not it ends disastrously). Place an ad on the internet, on various real estate rental related sites. 90%+ of all tenants start with the internet to find their rentals! Using the services of a real estate agent will mean paying a small commission, but it is probably worth it. Agents already have marketing in place and calls coming in from prospective tenants waiting to be placed. You may save 1-2 months or more of mortgage payments by using an agent... they'll most likely rent your property quicker. Make sure you understand about "Discrimination" laws. You can get into BIG trouble (and sued for lots of money) if you are found guilty of this.
Tenant Application
Step Two: Choose the best tenants!
Consider credit scores. Consider pets. Consider employment history. There are many factors involved in determining if a tenant will be worth the risk or not. (and make no mistake, ANY tenant is a potential risk). You have to weigh your odds. We prefer good credit scores (unless there was a past bankruptcy or foreclosure, or major medical issue - which can be explained and proved). Tenants with pets means potential additional damage (especially for highly active breeds and puppies). Consider collecting an additional refundable "pet deposit"! And make sure you do a background check. Oftentimes there are past instances of criminal activity, fraud, eviction, bad checks, etc that you can uncover quite easily. Make sure you call current employers and landlords. The more strict you are with the "application process", the more your tenants will take you seriously as a Landlord... in addition to the obvious: protect your investment and don't take a tenant out of desperation or frustration. It will NOT be worth it in the long run! *Use a property management firm to provide the background check for you. Charges usually range from $35-$100 and are WELL worth it! Most Landlords pass that expense on to the tenant, and the tenants gladly pay this "application fee" if they are genuinely interested in renting the property.
Step Three: Get Association /HOA Approval OR ELSE!!!
Make SURE you call your Condo or Homeowner Association's Management company and get a copy of the most recent Tenant Application for Approval. Fines can be hefty if your prospective tenants don't get approval BEFORE they move in!! And most Condo Association documents say they have the right to EVICT your tenant if they move in without prior approval! The tenants will need to fill out the packet, and owners will probably have to fill in some parts as well and sign, and all must be submitted with a signed copy of the lease. You should allow anywhere from 1-4 weeks for approval time depending on the management company. If you are working with a Realtor, they will take care of all this for you!!!
Step Four: Use an Excellent Lease!
There is no greater difficulty in a tenancy than having issues and not being able to enact any real solution. If the lease you used is weak or ridden with holes, chances are you're simply going to lose. The best leases come from attorneys and property management companies that have developed leases over many years to address virtually every conceivable issue you could run into. While these leases are designed to protect the Landlord, they are also made to be completely fair to the tenant and will thus be upheld the most if taken to court for any reason. We've seen it time and time again... Landlords create their own leases, or using the standard 2 page State lease provided by their Realtor... only to realize when it's too late that there's little course of action to take or ability to recoup loss, in a problem tenancy.
Step Five: Make sure you enforce your lease!
Don't become friends with your tenants. Odds are your "niceness" will be taken advantage of. Everyone goes through issues, even you. You have to continue paying your mortgage each and every month on time, no matter what happens in your personal life. Chances are your tenants will come to you and ask for leniency on paying late at some point. We see it time and time again. If you don't enforce all aspects of the lease at all times (you can certainly do it nicely, but you must be business-like at all times) the tenancy will become more and more problematic.
Step Five: Understand "Security Deposits"!
There are very strict rules and regulation for holding security deposits, returning security deposits, claiming from security deposits. Make sure you read up and understand what you are and aren't allowed to do. If you make a wrong move, you will lose. Judges don't take these things lightly, and they have no sympathy for Landlords who say "I didn't know".
Landlord Tenant Act
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