Owning a property is an achievement; making your property to generate income is a another feat to that achievement. While there have been lots of stories of real estate moguls and the crazy income they are getting, they all but have started on the first part of being a landlord. Yes. All things start with a beginning, first-timer they say.
In order to be successful, careful planning and research is needed. In addition, it is a must that you are familiar and aware of federal, state, and local laws governing the landlord-tenant relationship.
The People’s Law Library of Maryland listed the basics of becoming a landlord in the state of Maryland. And these are the following:
A. What are the various types of tenancies?
In a landlord-tenant relationship, property owned by the landlord is temporarily conveyed to a tenant. The conveyance creates what is known as a tenancy. A tenancy can be any of the following:
- Tenancy for years. A tenancy for years is created by an agreement between the landlord and the tenant. If the tenancy is longer than one year, the agreement must be in writing. If the tenancy is longer than seven years, although it may not be required, the agreement should be recorded in accordance with the local laws of the county or city that the property is located in. Generally, unless the lease states otherwise, termination occurs automatically upon the expiration of the term.
- Periodic tenancy. A periodic tenancy can be year-to-year, month-to-month, or week-to- week. This type of tenancy can be created based on when the rent is paid, and the terms of the lease, if applicable. Generally, unless the lease states otherwise, termination occurs automatically upon the expiration of the term.
- Tenancy at will. A tenancy at will exists if a tenant is given permission to take possession of a property, but there is no agreement regarding the length of the lease, or the payment of rent.
- Tenancy at sufferance. Typically, a tenancy at sufferance exists if a tenant does not have permission to take possession of, or remain on a property. A common example of a tenancy at sufferance occurs where a landlord rents property to a tenant, and the tenant continues to stay on the premises after his or her lease expires.
B. What laws apply to a landlord-tenant relationship?
As a Maryland landlord, you must know the federal, state and local laws that govern the landlord-tenant relationship. Because many of the laws can be complicated—especially the federal and state housing discrimination laws—it is advised that you contact an attorney to help you understand your rights and duties.
C. What are my rights and duties as a landlord?
A landlord has a duty to maintain the property, and must not disturb a tenant’s possession of property. A landlord is also prohibited from taking retaliatory actions against the tenant. Read full article in details here.
Logically, there are tons of ways on how and what to do as a first-time landlord. The company Chesapeake Property Management listed down 12 simple steps for first time landlords. Here’s a few:
1. Your home is no longer your home; it’s an investment property where tenants live
Renting out your home is a business transaction, where your home becomes an investment property occupied by tenants. If you are emotionally attached to your home and know you will get easily upset when your property manager calls you about repairs or other issues, then renting it out will be very tough for you.
2. Find a great property manager
Unless you are prepared to spend considerable time and aggravation managing your rental property, you need a great property manager who can help you with the entire rental process – preparing your home for market, compliance issues, lease negations, day to day management, etc. – as well as check prospective tenant references.
3. Check on your home mortgage loan(s)
Check on your mortgage loan and find out if you are permitted to rent out your home.
Know your monthly mortgage payment and make sure you are current. Your Realtor/property manager cannot ethically rent out a home where the landlord is behind on mortgage payments. The tenant is looking for a peaceful tenancy and it would be unethical to put a tenant in a home due for foreclosure or short sale. Be honest with your Realtor; this is really important.
4. Check in with your home insurance company about renting out your home
When you become a first time landlord, you will need to change your home owner insurance policy to a landlord policy and add liability protection.
5. Discuss becoming a landlord with your tax advisor
Becoming a landlord for the first time carries some financial benefits. Check in with your tax advisor so you can understand which tax deductions you can take advantage and how much deprecation you are eligible for.
6. Clean up your home so it shows well as an investment property
Just as you would if you were selling your house, you need to declutter, neutralize, stage and empty out your investment property. Schedule all of those repairs that you have been putting off and use licensed and insured contractors. You want to stage your home for rent just as you would for sale.
7. Pull out your original home purchase paperwork
Do you have lead paint paperwork in your files? A copy of your floor plan, layout, etc.? Your Realtor/property manager will need to look through what you have available so they can fill in the gaps. Full article here.
Being a landlord is both typical and not. Typical because you are doing business, not because your commodity is real estate and entails someone actually living in your property or using it for another business or purpose! But what if time has come and you need to downgrade or venture into another business but your property currently has tenant/s? Let us help you!