So you've decided to save some money and handle your rental property yourself. You don't choose to hire a property management team, and you are now a for-rent-by-owner landlord.
However, you might not realize how much work this entails. More importantly, you might not know about the rules and regulations regarding landlords in Charlotte, NC. Keep reading for a quick overview.
Know Your Landlord Responsibilities
Like any landlord, a person with a for rent by owner property must follow certain regulations. Typically, these responsibilities are handled by a property management company, but you've decided to do them yourself.
Owners will take on property maintenance, tenant communication, and rent collection to stay legally compliant. Before getting started, you should review Charlotte, NC, landlord-tenant laws.
Setting the Right Rental Price
In North Carolina, rent control laws favor the landlord. There is no limit on how much rent you can charge. Still, it's important to do market research to set the right rental price.
Determining a competitive price will help you stand out in the rental market. Setting too high a price is lawful, but you likely won't get many applicants. Setting the price too low will attract the wrong people and affect your cash flow.
Charlotte housing laws always state that landlords can increase the rent whenever the lease agreement ends. Both parties must agree on the lease renewal terms.
Screen Applicants
Every successful for-rent-by-owner property screens applicants to find quality tenants. Tenant screening is an effective tool for minimizing your risk as a DIY landlord.
A thorough background check can provide you with the following information:
- Rental history
- Credit history
- Criminal background history
- Employment verification
The rules for tenant screening are very specific. First, you must ask permission to screen tenants. To make things easier, put this in the application.
Second, you need to set and adhere to clear criteria for selecting tenants. You cannot discriminate, and doing so would be unlawful under the Fair Housing Act.
Organize Your Accounting Records
Renting your property for profit counts as a business endeavor. Real estate laws regarding accounting come from the IRS.
Landlords must pay taxes and report income with a Schedule E (Form 1040). Failure to follow the tax requirements could lead to fines and audits.
To make things easier during tax season, keep your records organized from the start. Utilizing accounting software is the best way to efficiently track your business transactions.
Is for Rent By Owner Right for You?
A for-rent-by-owner property requires a lot of work. You must become a DIY landlord who handles everything from tenant screening to rental property accounting.
If you read this guide and decide this isn't the right path for you, consider hiring a property management company.
Wilkinson Property Management, Inc. was founded in Charlotte in 1999. Our property management and tenant procurement services can help investors who need a small or large boost.
We can be your full-service property management team or help you as needed. Contact us today to learn more about our services.
