You have decided you want to create a new revenue source for yourself. You read the paper every day and see all of these properties for sale and decide that you will purchase one and rent it out. The goal is that over time to buy more houses to rent. Whether you own a single-family house or a large apartment complex, you still want a profitable business and avoid costly legal mistakes. Here is a brief overview of what every landlord needs to know about being a landlord.
Who Is a Landlord?
A landlord is the owner of real estate that is leased or rented to another person, called a tenant or renter. Either an individual or a business entity can be a landlord. A landlord can also turn over the property to be managed by a property manager who takes care of repairs, rent collection, terminations, and other management task. Many landlords, especially those with large complexes hire a property manager to handle day-to-day details. The property manager may live on-site or might be part of a larger property management firm.
There are some benefits to being a landlord. Owning a rental property can come with some of the following financial and lifestyle benefits:
- Property appreciation and wealth building
- Diversification of income
- Low-risk investment
- Leverage to trade up to more profitable properties
- Long-term and short-term tax advantages
- Part-time commitment
- Professional development
But there are some challenges about being a landlord that you should prepare for if you decide to rent out your property:
- Time—even if it is not a full-time job, being a landlord will take more than one or two hours each week and you’ll need to be reachable nearly around the clock.
- Problem/difficult tenants
- Difficulty renting
- Legal liability risks
- Costs, including mortgage, property taxes, insurance, utilities, maintenance, property management costs, legal costs, and more.
- The strict laws governing landlords and tenants in the state of New Jersey, including, but not limited to, the notice requirements, security deposit laws, eviction rules, and more.
There is a lot you can do to make sure that you can enjoy the best parts of being a landlord, while protecting yourself as best as possible from the challenges and liabilities. For guidance on being a landlord, including understanding your legal rights and obligations, visit our Newark landlord-tenant law blog.
From the Union, New Jersey business attorneys of The Jayson Law Group, thank you for reading our article, and come back for more regarding New Jersey Landlord-Tenant law.