Investing in real estate can be profitable and rewarding. However, it’s also easy to bring extra liability and risk upon yourself when you’re renting out a home. California is a unique state with a lot of laws and regulations that focus on protecting tenants.
Today, we are going to talk about how to legally protect yourself and your Roseville investment in this real estate world.
Use a Strong and Legal Lease Agreement
The best starting point for legal protection is your lease agreement. You always want to make sure you have a strong lease in place when you’re renting a property out to tenants. This is simply for protection, and a good lease will protect all parties. Everything should be drawn out in that lease. It should include your expectations for the tenant and your own list of responsibilities to the tenant. Don’t worry about being too detailed; you want as much information as possible documented in the lease so you can refer back to it if needed.
It’s also important to have a lease that’s specific to California. Many landlords make the mistake of copying a generic lease that they find online or in an old book. Use the most current lease that’s legally enforceable in California, otherwise you could run into trouble when you try to enforce that lease.
Know the Relevant Laws
Next, you want to be sure you understand the local, state, and federal laws pertaining to rental properties and landlords and tenants. Not only do you have to know these laws, you also have to follow them. It’s easy to make a mistake because you didn’t know about a certain legal requirement. Avoid these costly errors and make sure you understand things like fair housing laws, habitability laws, and the legal timeframes for returning security deposits. Then, you have to stay up to date on the changes in these laws.
Be Diligent with Quality Tenant Selection
Having good and well-qualified tenants in your property is a big part of avoiding risk and having a successful rental experience. Clearly, a good tenant will always cause fewer problems than a bad tenant. Make sure you have a thorough and fair tenant screening system in place so you can be sure you’re placing a resident who will pay rent on time and take care of your property. Look for someone with an excellent rental history and an ability to communicate well.
Keep Your Insurance Updated
Be sure to have a landlord insurance policy in place. If you are renting out a home that you once lived in, it’s important to switch. A landlord policy is different from your property insurance. In this case, you are having someone else live in the home and you need a little extra protection. So, review your insurance policy regularly with your agent and make sure you are properly covered.
Use Professional Property Management
Last, it’s always a good idea to use a Roseville property management company. We will always protect your most valuable assets and also be there to assist with any questions or concerns.
If you have any questions about how to protect yourself as an investor, please feel free to contact us at Sunburst Properties.