For property owners in California, renting out your property can be a lucrative source of income and can even grow into a profitable business. With the California rental market booming, now is the perfect time to rent out your vacant property.
Becoming a landlord in California requires research, preparation, and familiarization with local, California, and federal housing laws. Does the property owner need a business license to rent out the property? How can aspiring landlords grow a successful rental business? Good news: The answers to your California rental property problems are here.
Does the property owner need a business license?
In California, there isn’t any state law that requires a business license to rent property. However, prospective landlords will want to check local city ordinances to ensure no business license is legally required.
To legally protect yourself as a landlord, consider hiring a licensed property manager or agent to help screen applicants and maintain compliance with fair housing guidelines. If you do not want to break the bank, TurboTenants offers free software for landlords to help screen applicants and post listings.
Research local, state, and federal laws
Before renting your property, you must make sure that you comply with all relevant housing laws and guidelines. Check with your city or neighborhood house owners association for more information about local rental property laws and familiarize yourself with other important points. California real estate investment information.
In addition, the state of California housing law establishes guidelines for the rental process and the tenant screening process. Under California law, landlords are required to reveal certain information to tenants and applicants. State law also governs what types of fees can be charged to tenants, in addition to how landlords can do this collect rent legally.
California landlords are also required to provide tenants with written information about Megan Law. Landlords who rent out properties built before 1978 should warn tenants of potential exposure to lead-based paint.
Create an LLC for your rental property
Being a landlord is akin to running your own business and should be treated as such. While a business license is not legally required, real estate experts recommend set up LLCs (Limited Liability Company) for your rental property.
When you rent out property in your own name, you run the risk of being named a defendant in a lawsuit, and losing a lawsuit could mean losing your personal assets. To protect yourself, create an LLC for your rental. This will limit your personal liability for the value of the rental property.
Prepare a rental agreement
Preparing a rental agreement that provides sufficient legal protection requires research and compliance with fair housing laws. California state law doesn’t have a standard rental agreement, so contracts vary per property owner.
Begin by determining whether to offer your tenant a lease or lease agreement. Even if the lease agreement lasts for a set period of time—such as six months or a year—the lease agreement lasts only for the time covered by each lease payment.
For first time owners, it may be tempting to copy and paste a basic rental agreement from online. However, it is important to decide what sort of terms you want to include in your contacts. Specifics on each front, including the amount of rent paid, how it is going to be collected, how the tenant should handle repair requests, and an overview of entry rights. Rental agreements can be complicated and lucrative to make sure that you are right for you.
If you are not sure where to start, consider hiring a respectable lawyer. Because the lease agreement defines the duties and obligations of the tenant and the owner, taking your time to prepare the contract can help you avoid legal problems in the future.
While becoming a landlord can be an incredible way to earn extra income, it isn’t for everybody. If you are searching for quick profits on vacant properties, an easy Google search such as “selling my house fast in Solano County” will produce a broad range of choices in your area. For example, a company like Sell Quick California can help you sell your home in as little as seven days.
Ultimately, becoming a successful landlord requires thorough research, preparation, and familiarization with California housing laws.
