Accidental landlords often lack the necessary know-how for managing properties effectively. Paying attention to legislation, conducting market research, thoroughly preparing your home, and working with a property manager can ensure success in this endeavor.
Accidental landlord numbers are increasing nationally, as more homeowners enter the property rental market. According to the NAR, 20% of repeat buyers have opted to keep their existing home as a rental.
These new landlords find themselves launched into the world of real estate management, unprepared for the intricacies of making a success of it. Becoming an accidental landlord can be stressful and unprofitable for the uninitiated.
If you've decided to rent out your Arroyo Grande rental property, this article covers some useful tips to help you thrive in your new role.
What Is an Accidental Landlord?
An accidental landlord can be loosely defined as someone who finds themself renting out a property they own, despite property investment not being their primary occupation. This often happens when someone inherits a property unexpectedly or has to move to a new city and is unable to sell their home quickly enough.
After the low interest rates of 2020, some homeowners are reluctant to sell their homes in the current market. Realtor.com reports that as many as 50% of homeowners have given up trying to sell their homes out of frustration.
These unwilling landlords are choosing to rent their properties instead.
What Are the First Steps as an Accidental Landlord?
Before you advertise your property for rent, there are a few key aspects you need to cover. These are important to avoid complications later and maximize your profits.
1. Familiarize Yourself with Local Laws and Regulations
All landlords must abide by certain legal requirements and fulfill several responsibilities. These include:
- Maintaining a safe, habitable property
- Carrying out repairs and maintenance promptly
- Meeting your tax obligations
- Compiling fair and reasonable lease agreements
Stay updated with your state and city landlord-tenant laws. These outline what you can and cannot do as a landlord.
Before you can advertise your property as available to rent, you must register it with the city. Arroyo Grande requires landlords to pay annual fees toward the city's rental registry program.
They use this money to conduct research that informs their housing policies.
2. Carry Out Market Research
Landlords should analyze local market trends to help them maximize occupancy. This data will help you discover competitive rental rates and attract quality tenants.
Key research areas include:
- Comparing similar rental listings
- Analyzing market demand
- Learning tenant demographics
- Determining neighborhood vacancy rates
- Investigating economic factors affecting affordability
Your research will inform your decisions on pricing, marketing, and strategy.
3. Prepare Your Home to Receive Tenants
An attractive, well-kept home attracts more tenants. Take time to repair and refresh any areas of the home that might need a little attention. A fresh coat of paint can make a big difference to a home's appearance.
A property manager can advise you on worthwhile upgrades to pique tenants' attention. Things like outdoor areas and energy-efficient appliances are highly desirable to tenants.
What Is the Best Tenant to Have?
Every landlord dream of finding tenants who pay their rent on time, comply with their lease terms, and keep their property in good repair. Unfortunately, this isn't always the case.
The best way to ensure you place a good tenant in your property is through comprehensive background checks. It's best to hire a professional to carry out the tenant screening process.
FAQs
What are a landlord's biggest fears?
There are a few things that strike fear into the hearts of every landlord. Most of them have to do with bad tenants, such as:
- Unpaid rent
- Significant property damage
- Disruptive behavior
- Illegal activities
These factors can have far-reaching consequences, such as exorbitant repair costs, legal fees for evictions, and vacancies during property repairs or maintenance. Other factors that can impact landlords include damaging weather events and economic downturns that affect tenants' abilities to pay rent.
How long do most renters stay?
Due to rising house prices and high interest rates, most tenants are happy to stay where they are for the duration of their lease. Recent research suggests that up to 70% of renters renewed their lease agreements last year.
Some reasons tenants might leave include:
- Affordability
- Relocation for work
- Buying their own home
- Discontent with their living situation
- Poor landlord-tenant relations
A property manager can help you eliminate the last two factors through maintenance coordination and transparent communications.
Do renters have more rights than landlords?
California is considered a tenant-friendly state due to its strict rent control laws, but tenants don't necessarily have more rights than landlords do. Tenant rights in California include the right to:
- A habitable home
- Protection from unlawful evictions
- Fair rent hikes
- Freedom from retaliation
Landlords have the right to receive rent payments on time and to screen tenants. It's also their right to receive their property back in the condition they presented it to the tenant.
Property management firms are familiar with current landlord and tenant rights in California. They can advise you on how to proceed if you are uncertain about tenant rights in specific instances.
Success for Arroyo Grande Landlords
Accidental landlords must carry out a range of tasks in order to succeed in the complex California real estate market. They need to learn how to balance regulatory compliance, property upgrades, and market price fluctuations with profitability.
In most cases, it's wise to hire a property manager to help you make the most of your Arroyo Grande rental property by limiting vacancies and maximizing rental income.
Town and Coastal Real Estate and Property Management can assist you with every aspect of managing your Arroyo Grande rental home. Our leader, Mellanie Callahan, is a qualified real estate broker with over 30 years of experience in California real estate.
She is backed by a team of professionals boasting 65 years of combined experience who are dedicated to providing every customer with outstanding customer service. Browse our blog for more tips or reach out for assistance with your Arroyo Grande residential rental properties.
