Becoming A Landlord

Becoming a landlord, a legitimate and scrupulous landlord is no accident. You need to learn and follow the landlord tenant laws of your state.

I remember my first tenant. I just bought an old duplex that needed rehabbing. This was my first property I had ever bought. I was a tenant myself just the day before.

Quite honestly, I only had a vague idea what it meant to be a landlord. I was not well versed on the landlord tenant laws for the state I lived in.

When I went to collect their rent after closing the sale, five days after the first of the month, my tenants told me they were moving.

Not expecting this, I was a little unsure what I should do. I new they were liable for the rent at least for the five days they were there, and that is what I collected. Had I known the law better, I could have required them to pay a full month's rent.

The tenants gave improper notice to vacate the premises. They didn't know the law any better than I did. To avoid these situations, you must learn the proper steps to becoming a landlord. It will save you money in the long run.

Learn Landlord Tenant Laws

The first step I would take today, if I was just starting out in the business, is to learn how to become a landlord. Lesson one is: learn the landlord tenant laws for your state before you buy your first rental building. This is essential to becoming a landlord.

Get a copy of the landlord tenant laws from your state government or your lawyer. If you live in Wisconsin, you can download a free copy of "The Wisconsin Way - A Guide for Landlords and Tenants" at

http://www.datcp.state.wi.us/cp/consumerinfo/cp/factsheets/pdf/cp-127web.pdf.

Read the landlord tenant law for your state from cover to cover. Ignorance is no excuse when trying to defend your illegal actions before a judge.

I would also recommend giving a copy of the law to your tenants when they sign your lease. This should help you reduce tenant's errors caused by their ignorance.

Most tenants only know what you tell them when they move in. The rest of their actions is governed by what they or their friends "think" is the law.

Use State Approved Leases

Becoming a landlord, requires that you use the proper leases and forms recognized by your state. You can add your own rules and regulations as an addendum to your lease.

Have your attorney review your documents before you use them. If you have clauses in your rental agreement that are prohibited by your state laws, then you are asking for trouble.

It is far cheaper to correct errors before they occur, than after a judge disallows and voids your rental agreement letting your tenant off the hook.

Landlord tenant laws, at least in Wisconsin, generally favor the tenant. Tenants are viewed as a consumer who needs to be protected.

Join Your Local Landlord Association

I would highly recommend that you join you local landlord association. There usually is one in most major cities.

Your local landlord association, will help you in many ways in becoming a landlord. You will meet like minded landlords, real estate attorneys, and business people who can provide your rental business with various services.

A good landlord association will also keep you abreast of changes in the laws that will affect your legitimate home based business.

Don't have a landlord association in your community? Start one!

Join Your Local Real Estate Investors Club

Continued education is important in any business. Becoming a landlord is no exception. I would highly recommend joining your local real estate investors club.

You will meet more real estate investors who you can buy properties from, sell properties to, or partner with. The club I was involved with had monthly speakers about all topics of real estate.

We had real estate pros, who educated us on creative real estate investing techniques. We had insurance people who informed us about landlord and property insurance, and much more.

Attending real estate investing seminars is a great way to further your landlord education. Not only do you learn new ways to run your landlord business, but you will learn ways to reduce your risks when you buy, sell, or lease properties.

Screen Your Tenants

Landlording is not a home based business for everyone. Ten percent of my tenants, gave me ninety percent of my headaches. Screening your tenants is your first attack against renting to undesirable problem potential tenants.

People who can not or will not pay your rent are probably the most common cause of rental headaches. You need to rent to people who can afford your apartment.

While you cannot refuse to rent to people because of their race, creed, religion, sexual orientation, or legal source of income, you can refuse to rent to a person who cannot afford your apartment or will not keep it tidy.

Becoming a landlord means you must also act as a bank in many ways. A bank would not loan you thousands of dollars, if you could not show a way to repay the loan.

Nor should you rent your house or apartment to a person who cannot demonstrate their ability to pay your rent. I would take an application to rent my apartment from every tenant. Check your state and local laws to be sure you are not asking illegal questions.

Get their social security number, their current address, where they work, how much they earn, and all past landlords' contact information to name a few items. Get a few personal and/or business references and check them out.

You may have a tenant screening service available that can check to see if your prospective tenant is being evicted. Most likely you may be able to check your state court records online without going down to the courthouse.

If public records such as court records show your prospective tenant is being evicted, I would be very careful about renting to them.

Be sure to run a credit report on your prospective tenant. This will tell you if they are good about paying their bills or not. You will need to join your credit bureau in order to check out this personal information.

You will need your prospective tenant's social security number in order to run a credit check. You will also need your tenant to give, written permission to conduct a search. If they refuse to give you this info, don't rent to them.

Your prospective tenant checks out? Great! Get together with him, her, or them to sign a written lease and collect a security deposit of at least one months rent. Your lease can be month to month, or for a specified period of time usually 6 months, 1 or 2 years.

You might consider adding a clause in your rental agreement or lease, that your tenant agrees not to move during the winter months, say from November to March.

It is very hard to rent a vacant apartment in the winter months, at least in the northern states. Vacancies are very expensive to your cash flow.

Above all, treat everyone the same. Congratulations on becoming a landlord.

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