One of my favorite viral videos of all time is Funny or Die’s “The Landlord.” In case you are not one of the 83 million people who have viewed the video, I’ll give you the 30 second synopsis. Will Ferrell plays a tenant being hassled by an unusual landlord — a tough-talking 2-year-old girl named Pearl, who demands the rent and threatens to put Ferrell on the street if he doesn’t pay.
Oh, and the 2-year old uses language that would make a sailor blush.
Pearl is the daughter of Will Ferrell’s comedy partner, Adam McKay. Pearl was able to enunciate well at an early age and McKay thought it would be funny to feed her those insulting, expletive-laden lines and make Ferrell’s character cry.
I am guessing you are not planning on making videos of your toddler on a swearing rant as a way to supplement your income.
But many of you may have considered becoming a landlord. Perhaps you inherited your grandmother’s house. Maybe you are moving and are interested in renting out your old place.
My husband and I fell into the latter category in 2005. We moved from our tiny bungalow in the historic M Streets neighborhood of Dallas to greener (and bigger) pastures in the suburbs. The old house was a desirable rental property because it was zoned for the top public elementary school in the Dallas. Let’s rent it out, we said, how hard could it be?
In turned out being a landlord involved much more than just cashing the rent check each month. Much more. Here are some of the lessons we learned.
Tenant only have problems before 9:00 a.m. and after 5:00 p.m. or when you are against a big work deadline. I’m being a little facetious here, but you need to be prepared to handle tenant problems anytime of day (or night).
Tenant has a plumbing issue? That’s your problem to fix (and sit in the house waiting for the plumber). After the first couple of times this happened, my husband and I retained a property management company to handle tenant problems (which seriously ate into our rental income).
It’s a lot more expensive than you think. Unless you are planning on being a slum lord (and please don’t), you need to make sure you put aside enough money for unexpected expenses and big-ticket items. This is in addition to insurance, taxes, and if you have one, mortgage. Plan also for paying for utilities when the property is vacant.
Choose tenants with care. Be sure to check any prospective tenant’s credit, confirming the source and amount of income, and checking in with current and previous landlords. My husband and I rejected several perspective tenants based on background checks (including a teacher at the desirable elementary school).
There are laws, lots of laws, you need to know about. There are laws you need to follow when you become a landlord.
- There are things you can and cannot ask a perspective tenant.
- There are certain ways you must handle a tenant’s security deposit.
- There are Fair Housing Laws, which dictate what is considered discrimination. For example, you can’t advertise a property as perfect for female roommates or specify no kids. No pets is fine, so feel free to discriminate against dog owners.
- There are safety and health codes.
- There is proper and legal ways to evict a tenant.
Is your head spinning yet? I know my head and my husband’s head were, and we’re both lawyers.
Don’t rely on a generic lease from a general real estate site or a big box store. Landlord/tenant laws vary from state to state and city to city. To make sure you have a good lease, consult with an attorney.
Also, remember you must respect your tenant’s privacy and cannot legally enter the property without advance notice.
In the end, my husband and I ended up selling the house after a year. Turns out we enjoy being lawyers better than being landlords.
Are you thinking about becoming a landlord? Leave a comment or send me an e-mail.
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Copyright © 2018 by Siobhán Fitzpatrick Kratovil. All Rights Reserved.