A landlord should avail himself of all applicable free legal information available. And if it raises more questions than answers, that too is a good thing!
If you manage your own properties or employ a property manager, you as the landlord will be held responsible. As a landlord you have a duty to do personal inspections of your properties to ensure they are habitable and safe. You will not shift responsibility and/or liability if you employ a property manager. In fact, you will be held responsible for your manager's actions when he is conducting business on your behalf.
Unfortunately, the landlord is often perceived as someone with lots of money. This makes a landlord particularly vulnerable to claims. In reality many property investors are middle class people whose investments are part of their retirement plans.
It is especially these landlords who need to find as much free legal information as possible to safeguard themselves and their investment.
Whether you are a current landlord or are considering investing in property, you should investigate the following:
- Which legal entity should own your properties e.g. a Limited Liability Company (LLC), Limited Partnership (LP), Corporation, Trust etc.
- Should you set up more than one of the above to own various properties.
- To what extent do you need liability insurance.
- Do you need workmen's compensation for repairmen that you employ.
- Would you require insurance for lost rent and mortgage payments.
- If you employ people to run your real estate business, can you insure against employee's dishonesty or litigation in the workplace.
- Do you need to have insurance on your property manager's car whilst he is traveling on your business.
- Which tax advantages can you utilize as a landlord.
It is most important to keep your personal property separate from that of your investment properties.
Apart from the free legal information available on the Internet and at home owner's associations, there are many books available and attendance at property seminars is invaluable.
To assist the landlord in handling his investment properties, he should have a team consisting of at least a real estate attorney, an insurance broker and accountant.
Investing in property can be hugely profitable. Paying for expert advice is cheap at the price.
I agree that investment in property can be and is for me very profitable. Your recommendations regarding the right legal entity, having an expert team and conference attendance is spot on.
I believe that ongoing attendance of seminars is important to keep me abreast of current trends in property investment.
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Thanks for the info - When should I buy? by: Heather
I'm thinking about doing this in Nebraska. When do you think is a good time to buy? Thanks so much.
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Best Time for Property Investment by: Steve
I don't believe there is ever a bad time for property investment for a landlord.
If property prices go up, fewer people may be able to buy their own properties. The demand for rental properties will increase and so will rental prices.
In a market where there is a marked decrease in property values, there are many opportunities to buy at a very good price.
Prices go down when there is not a high demand from buyers. This may be due to increased interest rates or an inability to obtain credit from finance institutions.
Again, this would create a good demand for rentals.
If a landlord does his sums carefully, allow for some vacancies and is able to finance any shortfall between rental and mortgage repayments, property is always an accruing asset.
There may be fluctuations in the short term, but historically property in a good area will always appreciate in the long term.
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Renting Out Home by: Michele
I am thinking of renting out my own house for a year and see how it goes being a landlord.
Is there any advice you can give me on how to protect myself legally during this time, etc.
