From Homeowner to Landlord: Understanding the Switch

When deciding to rent out your home there are a few things one needs to keep in mind before making the switch from homeowner to landlord.

For example, the home must be in a rentable condition. This means that the home must be in better condition than how the owner lived. This is important for many reasons, for instance you must provide a safe and habitable home for the tenant. In many cases, this can become a legal issue should the home not have all health and safety issues corrected. A second reason for making sure all the repairs have been taken care of is to avoid the multitude of phone calls for requests to fix things.

The owner must determine what the market value of the home is. Most often, for rent by owners place the home up for rent and expect tenants to pay their entire mortgage. The renter is not responsible for paying the mortgage. The rent must be equal to the market value of the area; in other words it needs to be equal to what other people are renting the same size home in the neighborhood for, otherwise the home will not get rented.

When tenants do not pay their rent on time, this can become rather stressful. Management companies offer screening services for landlords which will save money and time in the long run. However, there are a few legal processes that may be taken. A landlord should first and foremost post a three day pay or quit stating how much in rent the tenant owes that must be paid within 3 days. Should the tenants not pay within the allotted 3 day period, then an eviction attorney is the next step. An eviction may run around $650.00. Property management companies can be an economical source when used monthly.  They can help ensure that the tenants going in are a good fit and can ensure the correct steps are taken in the event an eviction needs to occur.

Evictions while costly happen all the time. The main reasons why tenants stop paying rent are due to various reasons. They be in-between jobs, couples or rooms mates split up or even a job loss or cut hours. Evictions may take up to 60 days, sometimes longer. If the eviction takes longer than 60 days it is mainly due to the landlord not properly serving tenants or lack of correct paperwork being filed.

Lastly, tenants do not always take care of the home. This is the most frustrating part when making the switch from homeowner to landlord. Not everyone has the same standards and a renter’s mentality can sometimes be “this is not my home, it is just a rental.” Another issue is that sometimes people rent because they do not wish to keep up their home. Do not get the wrong idea here, many tenants keep their homes impeccable, but there are some who do not. These are all potential pitfalls when it comes to transitioning from homeowner to landlord. Make sure you do all your research ahead a time that way you can be prepared for when you decide to make the transition. When in doubt, try a property management company. The less you have to worry about, the better and in the long run it will save you time and money.

If you have questions about managing your rentals or need a professional manager to help rent or manage your home please feel free to call us at LCL Realty and Property Management at (951) 260-0711 or visit our website at www.LCLRealty.com