Today, we are talking about owner responsibilities. If you are thinking about acquiring or have acquired rental property as an investment, it’s a great way to build wealth. However, like all investments, you need a sound strategy. Efficient and economical management should be part of that strategy and it’s necessary to achieve your goals. It isn’t rocket science, but there are a few key ingredients you need to know for successful investing. If you are new, we can help you get started. These are three of the primary responsibilities you need to be aware of as an owner.
Statutory Requirements
There are a number of statutory requirements out there governing rental properties. They protect you as well as the tenants who occupy your property. It’s important that you understand what landlords have to abide by. There are federal, state and local ordinances that impact rental properties. You need to be aware of building codes and ordinances, sign ordinances, habitability issues, ADA requirements, etc. It’s important that all owners understand these requirements because not understanding them isn’t an excuse in the eyes of the law.
Fiduciary Responsibilities
Any time an individual is responsible for another person’s money or property, a fiduciary duty is established between those people or entities. So when you hold a security deposit for your tenant, there are legalities for how those funds are held and accounted for. This relationship has an immediate presumption of trust and confidence that you must honor as an investment owner.
Maintenance
All properties require ongoing maintenance whether it’s residential, commercial or your own home. It’s best to think of the house as a living entity with its own natural aging process, even though it’s an object. Statutory and fiduciary regulations make ongoing maintenance an absolute necessity. Lack of ongoing regular maintenance can take a small problem that’s relatively inexpensive and quick to fix and turn it into a major problem that causes a lot of downtime and a major expense. Typical consequences will include loss of rent, having to pay tenants losses, and lawsuits alleging negligence and construction defects.
These are just three of the areas that rental property owners must be aware of and well versed in to avoid potential long term costs down the road. If you have any questions, please contact us at Bayside Management.
