Converting your home into a rental property comes with several benefits. You can increase your monthly cash flow, significantly reduce any debt you might have, and also take advantage of the various tax breaks available. Investing in Mountain View real estate can be tricky but rewarding!
While the benefits are many, there are considerations that you should take into account before making the move to be a landlord. Despite you being a resident of CA, property leasing is a whole new ball game. To advise you and guide you on your new journey, the team from Action Properties has put together this article.
The Responsibilities of Leasing a Property
As you are thinking of renting out your Mountain View property, think about whether you have what it takes to be a landlord. A landlord is responsible for the daily running of the property.
The tenant is the occupier, but it is your responsibility to ensure that the space is both safe and habitable. In addition, should there be any challenges, you should always be reachable and in a position to respond to their request.
Apart from the collection of rent, you will also be responsible for maintaining the property, marketing it, and administration and enforcement of the lease agreement. And don’t forget about filing your taxes every year. The rental income should be reported as part of your returns.
The only exception to this is provided in the Minimal Rental Use rule. If the property is rented for less than 15 days, the income should not be reported. You will also not be eligible to take advantage of property tax benefits such as depreciation and deducting property expenses.
Making the Property Rent-Ready
Since this used to be your home, you might argue that it is in the best condition. You have gone to great lengths to maintain the fixtures and fittings. However, you still won’t be able to rent the property as it is. You must add different elements and amenities that will make your property more attractive.
For example, depending on your target demographic, you might have to renovate the kitchen and the bathrooms or some other place. You should also consider adding extra storage spaces. Professionals and young graduates would be attracted by a dedicated working space, high-speed Wi-Fi, and a bike rack.
Get in touch with an experienced property professional who will advise you on what tenants are looking for in a property.
Property Marketing & Advertising
The available tenant pool needs to be aware of the vacancy on your property. And the only way to do so is through comprehensive property marketing and advertising.
Before you create any ad, inspect your property and the neighborhood to identify its alluring features. Whether it’s stainless appliances, proximity to good schools, or new hardwood floors, these features should sell the property to a tenant. Also, make use of adjectives that can give a potential renter a good idea of the amenities to expect.
With a good description of the property, use quality, high-resolution photos that display your property in all its glory. The photos and flowing descriptions should be the main features of your ad. Use reputable listing websites that have high online traffic. This will reduce the waiting time for your vacant property.
An important part of marketing is pricing your rental property. How much should you charge for rent? This is not only important to your tenants but also to you. With a lower-than-market rent, you will receive good attention from prospective tenants. However, you might have challenges meeting property expenses and returning a profit. A high rental price will chase away potential renters.
Hire a Professional Property Manager
Having a rental property is more than just placing any tenant and collecting rent every month. It is an intricate and demanding process that requires you to put in the time and effort. From our experience in the CA property industry, what retains a tenant on the property is the quality of management. A tenant must know that their every demand and need will always be taken care of.
A professional property management company should be able to offer a wide range of property solutions. They would screen potential tenants by running background checks, market the property to potential tenants, and be ready to handle any maintenance issues. Rely on a company that has a reputation for comprehensive property solutions, professionalism, and integrity.
Compliance with the Law
You will be required to be in the know of applicable property laws and statutes. While federal law is applicable uniformly throughout the country, state law often varies from state to state, so make sure to know the California Landlord-Tenant Laws.
Some of the applicable state laws in California include:
• Security deposit laws. The maximum deposit to be charged is 2 months’ rent. A landlord is also not required to document the state of the unit before collecting the deposit.
• Termination of the lease. A tenant can legally terminate the lease early if the unit is inhabitable, harassment by the landlord, active military duty, or the lease provides for early termination. A tenant who chooses to break off the lease may still be required to pay for the remaining term.
• Rent reviews and increases. State laws provide that a landlord can only increase the rent twice annually or every 12 months. A landlord can only increase rent if the lease agreement provides for it. A tenant must receive a 30 days’ notice prior to the increase in rent.
These are just a few laws that are applicable to your Mountain View property. You must ensure that your property is compliant with all.
As you can appreciate, being a landlord is no walk in the park. The law, and your tenant, have expectations that must meet without fail. If you foresee challenges in meeting the needs of your rental property, rely on the leading property management in the area.
Action Properties is a specialized property company offering a full range of property services and solutions to its clients. We manage a broad range of properties, from condos to townhouses to single-family houses. Serving property owners in Santa Clara, Palo Alto, Sunnyvale, Los Altos, and Mountain View, we have the experience to ensure your property needs are comprehensively met.
For a comprehensive property management solution, get in touch with Action Properties today.