Are you thinking of renting your Los Angeles home? You may have done this before, but if you are new at being a landlord, you should consider a few things:
Do you want to rent your home furnished or unfurnished? This of course will depend on your reasons for leasing y,our home. If this a temporary situation and you do not want to store your furniture, renting furnished is a good idea. However, bear in mind that damages may occur especially as your renters may not be as carefully with your property as you would be.
If you live in a condo building there may be rules that do not allow you to rent for less than a year. At the same time make sure that your building allows you to rent. It is common now for there to be restrictions in the association rules that don’t allow rentals until after you have owned for a year or more and then you go on a list.
If you live in a house then the terms of the lease are up to you. Here you need to consider the expense of short-term rentals because you are going to have to clean and possibly paint every time someone moves out. If you do consider a short-term lease you may be able to charge a little more as short-term rentals are difficult to find. It is most likely that you would rent your place furnished in this case.
Will you allow pets? Again if you live in a condo association you would check on the rules. They may allow pets for owners but not tenants and also there may be weight or size restrictions. Also if you have allergies are you going to be O.K. after the tenants have moved out. You may consider a pet deposit, especially if the place is furnished.
How much of a security deposit are you going to ask for? It is usual to ask for two months, but depending on the value of items in your home and especially if you are renting the place furnished, you may want to ask for a little more. In Los Angeles you are no longer allowed to ask for first month, last month, and security. It is only security. Also legally, if your tenant stays longer than a year and you hold on to the security deposit you must give the interest accrued on that security back to the tenant on an annual basis.
Will you manage the rental yourself or hire a property manager? If you are going to be residing long distance you may consider the latter. There is no set fee for this but you can estimate around 6% of the rent. This is a ballpark average.
What are you going to charge for late payment of rent? You would probably set a number of days after the rent is due when it becomes delinquent and set a fee accordingly.
You should also set house rules. In a condo complex the tenants would follow the rules of the building, but in a house you should ensure that the tenants do not disturb your neighbors.
If the tenants want to extend their lease after one year you will need to decide if you want them to convert to month-to-month or sign a new lease. At this point you will need to check by how much you are able to raise the rent if you choose to do so. If your home is under rent control you are only allowed to raise it by up to three percent.
Being a landlord is not for everyone. If you purchased your property for investment purposes then you hopefully prepared for this, but renting your own home is a different matter. Choose your tenants carefully and be prepared to take care of them. They are entitled to “quiet enjoyment” of the property so needed repairs must be taken care of promptly.
If you are lucky and everything goes smoothly, having a property that brings you good income is a great investment especially in a market with low rental inventory.
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