In every city, you’ll find different laws and regulations for landlords. Specifically, each jurisdiction has its own codes governing the actual properties and what is required to rent them out. For example, in some states, you are required to register your rental property with the city and allow the authorities to inspect it. Others require some type of training. In Salt Lake City, Utah, for example, landlords are required to participate in a “Good Landlord Program” to learn about avoiding code violations.
What type of training do landlords need?
If you’re simply purchasing a residence yourself and renting it out, you aren’t usually required by law to get specific training. However, if you’ll be managing property for other people or companies, most states require you to have a real estate license. Either way, pursuing this type of training is never a bad idea. And fortunately for busy professionals, the program is most often offered online.
The first step is to take an online learning self-assessment to see whether distance education will be a good fit for you. You can then go through the program, usually at your own pace, where you’ll learn property laws and sales techniques. The good news is that you can usually begin running your business while you’re in the program. But you’ll need to check with your city housing authority to make sure you’re complying.
What type of license do you need to be a landlord?
Just as with training, all states and cities have their own regulations. But for renting your property out to tenants, most licenses apply to the property itself rather than the landlord. Any business requires licensing or registration in most states. And in certain instances, you may even need to incorporate. This is something you’ll need to speak to your CPA about, and it largely depends on how much income your property will be bringing in.
Aside from that, some specific licenses might apply to your property. One is a certificate of occupancy. Some cities require these for zoning purposes and usually require inspections. The inspections ensure that your property is zoned and safe for occupants. Another is a housing business license that is specific to rental properties.
How to become a landlord
Once you’ve checked with your city officials, decided on training, and gotten your proper licensing, you’re pretty much ready to be a landlord. But you need to know some important things.
First, you need to brush up on your landlord/tenant laws. These vary by state and cover various aspects of renting out your property. Among the most important are eviction processes, security deposits, maximum lease lengths, and property maintenance.
Next, speak to your CPA or attorney to make sure you’ve covered all of your legal bases. You’ll need a good lease agreement with clear restrictions and policies. For example, your tenants need to know who is responsible for repairs. While most landlords handle large problems, tenants are sometimes responsible for minor issues.
Lastly, you’ll need to decide on your ideal renter. Your renters should be people who pay their rent on time, take care of your property, and don’t cause any problems. The only effective way to do this is to run a tenant background check on every applicant. This should include a credit report, reference check, and sometimes a criminal history check. And before this process, you’ll need to decide what your minimum criteria will be. For example, you might decide not to rent to anyone with a bankruptcy on their record or a credit score of less than 600.