If your home isn’t selling, you may be thinking of renting it. What do you need to know about landlord responsibilities before becoming a landlord yourself? Go through this landlord checklist to be more prepared for the responsibilities you will face.
1. Tax, insurance and permit information: Being a landlord has several tax benefits and provides you with an extra source of income; however, it’s important to understand tax, insurance and permit information before you rent your home.
o Taxes: One of your landlord responsibilities is to file taxes on all your rental income and expenses. One of the benefits of being a landlord is that you may be able to deduct mortgage interest, real estate taxes, advertising costs, insurance premiums, rent management fees, utilities you pay, travel to and from the property, legal and account costs, and depreciation on the rental property. Visit the IRS website and consult a tax advisor for more tax information regarding renting residential properties.
o Insurance: Your homeowner’s insurance covers your home and any personal property it contains. If you’re not furnishing the space, a rental-home policy, which costs less and only covers the building, may be a better option. However, remember to:
§ Consult with an insurance provider and speak to your mortgage servicer
§ Account for any specialty coverage such as flood insurance
§ Require your tenants to obtain renter’s insurance if they want to cover their personal property in the event of an accident
o Renting permits: Check with your town or city building regulations to find out what you need to do before becoming a landlord. Some cities may request that you obtain a permit in order to rent your home. This may require a home inspection and certificate of occupancy.
2. Maintenance & utility liabilities: As a landlord, you’re responsible for maintaining the premises. The city or town you live in may have specific requirements and you should look into local laws. However, typical responsibilities include:
o Fixing the locks
o Keeping safe and clean receptacles for garbage and recycling
o Maintaining adequate weatherproofing and insulation
o Making heat, water and electric or gas available by payment or functioning systems paid for by the tenant
o Performing routine maintenance yourself or through a hired handyman
3. Landlord rights:Landlord rights and responsibilities vary by state. However, you will likely have access to the apartment at reasonable times for repairs and the right to demand advance notice if the tenant plans to move out. You also have the right to evict tenants if they are not paying rent or violate the rental agreement, provided you give them fair notice or the opportunity to rectify the situation. If you are still trying to sell your home while renting, you should place a clause in the rental agreement outlining what will happen in the event an offer is made. It is also important to check with state requirements here to ensure you are abiding by local laws with respect to notices of delinquency or eviction.
4. Tenant rights:Your landlord responsibilities include respecting the rights of your tenant. This means following local rules, regulations and fair housing guidelines, and maintaining the property. Rights may vary by state, so check with your lawyer to ensure your rental agreement respects your tenant’s rights regarding privacy and property.
Use the extra rental income to make your mortgage payments
Being a landlord should not be taken lightly and requires significant upkeep of the property. This is not a complete list of responsibilities and you should look into state laws regarding security deposits, safety and temporary arrangements in the case of property damage. However, if you think you’re ready to take on a landlord’s responsibilities, or possibly find someone to manage your home, renting may be an option when you can’t sell the house. You can then take advantage of the rental income to make mortgage payments.
Sponsored content was created and provided by RBS Citizens Financial Group.