Shapiro Gettinger Waldinger & Monteleone, LLP

Are you thinking of becoming a landlord? Before you rent out your property, there are several things you need to know about real estate law and the legal side of becoming a landlord.

Renting out real estate properties can be an incredible way to increase your personal income and bring in new streams of revenue. Many consumers like the idea of renting their personal home when they move out of state or even acquiring new properties for the sole purpose of renting them out. No matter what type of real estate you plan to lease, it's important to remember that you can't just simply decide to rent your property and find a tenant. In fact, before you become a landlord, you'll need to understand the types of legal issues you may encounter when you begin leasing real estate to potential tenants. Thoroughly understanding the laws surrounding tenancy and landlord obligations will help ensure that you not only follow the laws to the best of your ability, but that you have a positive experience, as well. Here's what you need to know.

You need insurance

Traditional homeowner's insurance isn't enough when it comes to renting out your home. This is because there will be other people living on the property. There are different types of insurance available, so consider which form of insurance meets your needs and how much coverage you want. Obtaining the right type of insurance protects both you and your tenants, so make sure you acquire the proper insurance before leasing out your home. You may be able to obtain coverage due to damaged items on your property, as well as things such as fires or flooding.

You need a lease agreement

You need more than a verbal agreement when it comes to leasing out your home. Even if you plan to lease to a family friend, relative, or colleague, you need to have a legally binding contract in place that will protect you both. This contract should outline the duration of the lease, the monthly rent charges, and behavior policies for tenants. You'll need to have clear guidelines as to what you expect from tenants, as well as what they can expect from you. For example, will they be responsible for maintaining the exterior of the home? Will you take care of mowing the lawn? Be specific in your lease and make sure you are both in agreement over the terms.

You need to be ready for the cost

Being a landlord isn't for the faint of heart. There will be costs associated with renting out your property. For example, if the dishwasher in the home breaks, you'll need to repair or replace it. If a tenant suddenly moves out and does not clean the apartment, you'll need to hire someone to do so. Additionally, there may be months where you do not have a tenant in the property. When this happens, you'll need to cover the cost of the mortgage and insurance on your own, so make sure you're ready to handle this side of real estate rental.

No matter what type of property you're planning to rent, make sure you meet with a real estate attorney who can offer you advice and guidance as you move forward. Your attorney can help you draft a lease agreement for potential tenants and can assist you in ensuring you understand the real estate laws that may affect you.