What Role The do Landlords Play?
The primary role of the landlord is to provide accommodation that is of a decent standard and ‘fit for purpose’. It is the landlord’s responsibility to ensure the safety of their property and to keep it well maintained. This applies to the whole structural part of the property as well as interior fittings, furnishings and appliances. It is also the role of the landlord to make sure that the tenant is aware of their duties and responsibilities and to help address any issues they may have before and during their tenancy. Landlords are also required by law to protect the tenant’s deposit in a government-approved tenancy deposit service.
Landlords have many roles and responsibilities. Their duties involve much more than just collecting rent. Landlords are often conflict solvers, repairmen, salespeople, and negotiators. They have to know how to handle tenants, how to deal with irate neighbours and how to charm property inspectors.
Being a landlord also involves following the law. There are national, as well as statewide landlord-tenant rules that every landlord must follow. This includes rules for collecting bonds, following health and safety standards, being a live-in landlord, and evicting tenants. Here is what you need to know about being a landlord.
Landlords invest in real estate as a source of financial profit. The monetary benefits of being a landlord include a steady stream of monthly tenant income, as well as ownership of real estate property which has the potential to appreciate in value. Landlords have specific rights and responsibilities which vary from state to state, however, there are general laws, common to all states.
Landlords have the right to collect rent, as well as any prearranged late fees. They also have the right to raise the rent as defined in the tenant-landlord lease agreement. When tenants do not pay rent, landlords have the right to evict them. The process of eviction also varies from state to state. Most states provide landlords with the ability to collect back rent as well as legal costs.
A lease is a legally binding contract outlining the terms under which one party agrees to rent property owned by another party. It guarantees the lessee, also known as the tenant, use of an asset and guarantees the lessor, the property owner or landlord, regular payments for a specified period in exchange. Landlords are responsible for maintaining their rental properties in a habitable condition, managing bonds, and ensuring that a property is clean and empty when a new tenant moves in. The landlord must also follow all local building codes, perform prompt repairs, and keep all vital services, including plumbing, electricity, and heat, in working order.
Pros and Cons of Being a Landlord
Landlords have financial advantages and disadvantages when investing in a rental property. Among the benefits, a landlord may leverage borrowed funds to purchase a rental property, thereby needing a smaller portion of the total property cost, to gain the rental income from the structure. The rental property can secure this debt, freeing up other assets belonging to the landlord.
Also, most costs associated with rental properties are tax-deductible. If there is no net profit after expenses, rental income is essentially untaxed income. As the rental property mortgage is paid down, landlords increase their ownership percentage of their property and gain access to the appreciation of value.
However, when a landlord sells a property, they will pay taxes on any capital gains unless they roll over the money into another rental property.
The Role of a Leasing Agent
As a landlord, you are responsible for getting your apartments/properties rented. When you are trying to fill a vacancy, you will often play the role of a Leasing Agent. You will have to advertise your rentals, set appointments with prospective tenants to view the property and make yourself available to show the property. You will also need to determine the pros and cons of renting to certain individuals.
Landlord as Salesperson
While attempting to get tenants to move into your units, you will also play the role of a salesperson. You will have to explain why your property is more desirable than any other unit on the market and convince prospective tenants to rent from you.
Landlord as Detective
When trying to select the right tenant for your property, you will play the role of detective. You will have to gather information about the tenant by speaking to their former landlords, their employers and by running a credit check. You will then have to analyze all the information you gather and rely on instinct to determine if the tenant will be the right fit for your property. Things to look for include someone who is going to pay their rent on time, sign and abide by a long lease (at least a year), be respectful of their neighbours, be clean and not complain often.
You will also play the role of a detective when handling tenant disputes. You will need to investigate to find the truth of what the dispute is about.
The role of the detective will also fit when you are searching for the root cause of a maintenance problem. If you have a roof leak and no noticeable roof damage, you will certainly have to play detective to determine where the leak is coming from.
The Role of Negotiator
A landlord’s next role is that of a negotiator. When hiring outside contractors or repairmen, the landlord must negotiate to get the best price, as well as negotiate to get the person to come to the property as quickly as possible.
If a landlord has more than one unit, they must negotiate when buying materials to get the best price for buying in bulk. For example, if a landlord is going to buy four stoves from a store, it is reasonable to ask for some type of discount.
A landlord must also negotiate any contract they sign, whether it be the terms of a lease with a tenant, a mortgage with a bank or a contract with an electrician to hardwire smoke detectors.
The Role of Debt Collector
A landlord will play the role of a debt collector when they collect rent from their tenants each month. This role will intensify if a tenant is late on their rent or does not pay at all. The landlord must then enforce late fees or file to evict the tenant.
Landlord as Repairman
Even if a landlord does not have extensive construction knowledge, they will be called on for maintenance requests. A landlord will be called to fix broken doorknobs, blown-out light bulbs, malfunctioning smoke detectors or to turn on the pilot light of a boiler.
As a landlord, it is a good idea to educate yourself on some maintenance basics. This will help save you from spending a lot of money to hire plumbers or other repairmen for a job that you may be able to easily fix yourself, such as a leaky faucet or toilet that will not stop running.
Landlord as Therapist/Counselor
Your tenants will often confide in you about very personal issues. They may call you in hysterics saying they can’t pay their rent because their roommate moved out or they broke up with their girlfriend. They may call you at 2 in the morning in a state of panic because they have a leak in their bathroom. In these situations, you might play the role of therapist or counsellor as you try to calm the tenant down and work out a solution that benefits you both.
The Role of Supervisor/Watchdog
As a landlord, you may be the supervisor of your units and your tenants. You will need to provide a clean, quiet, safe, and fully functioning environment for all to enjoy. You will need to perform preventative maintenance to keep your property in top condition and to keep your tenants happy.
Bond management is also a critical obligation for any landlord. While landlords have the right to charge tenants a bond to cover both property damage, as well as unpaid rent, the deposit does not ever actually belong to the landlord. Rules and laws governing bond amounts and how they must be maintained. These rules vary from state to state. Landlords who breach these laws could face legal consequences.
The best way to know if your landlord is up to scratch is if you get information from their past tenants. Tenant reviews will provide you with a different point of view to the property than the one advertised by the landlord or leasing agency.