Investing and owning single-family rental properties can be a thrilling and profitable investment. Unlike other types of investments, there are many factors you must understand to successfully go from a property owner to a landlord. Suppose you are a Layton rental property owner getting ready to lease for the first time. That being the case, it is essential to fully understand the basics of leasing strategies and, even more importantly, the laws that now apply to you and your renter. We’ve put together a comprehensive guide to get you started on leasing your first property. By following these simple guidelines, you can make your first experience a successful one.
Renter Screening Process
One of the first and essential tasks in leasing your rental property is identifying the ideal renter. And the easiest way to accomplish this is to have a good tenant screening process for each applicant. To determine whether they are the ones you’re searching for, you will need to gather information from your prospective renter. At a minimum, advise them to fill out an application that includes all intended home occupants’ names and birth dates (incorporating those under 18), five years of employment history, and at least three past rental references. Additionally, you need to get Social Security numbers for all adult renters and perform a background check on them all. After that, call and verify the information on their application. If possible, get in touch with any previous landlords and get details on their renting history. Even though it could take some time, the more research you get before you sign that lease, the less likely you will be disappointed in the future.
Avoiding Discrimination
As you advertise to and screen renters, it’s important to avoid discriminating against potential renters, even if it’s inadvertent. Multiple federal laws make it prohibited to discriminate against a renter based on race, sex, color, national origin, religion, handicap, and familial status. These laws include:
- Fair Housing Act (FHA): The Fair Housing Act (FHA) is a federal law that prohibits discrimination in housing because of race, color, national origin, religion, sex, familial status, or disability. The FHA covers all elements of the rental process, including advertising, tenant selection, and terms and conditions of tenancy.
- Americans with Disabilities Act (ADA): Also covered by FHA is a federal law that prohibits discrimination against individuals with disabilities. Landlords who own multi-unit buildings of 4 units or more are supposed to make reasonable accommodations for persons with disabilities, like allocating accessible parking spaces or installing grab bars in bathrooms.
- Age Discrimination in Employment Act (ADEA): The Age Discrimination in Employment Act (ADEA) is a federal law that forbids discrimination against individuals 40 years of age or older. Although the ADEA is mainly meant to protect employees, it also prohibits discrimination in housing based on age.
- Equal Credit Opportunity Act (ECOA): The Equal Credit Opportunity Act (ECOA) is a federal law prohibiting discrimination in credit transactions, including rental transactions. Under the ECOA, landlords may not discriminate against individuals based on their race, color, national origin, religion, sex, marital status, age, or because they receive public assistance.
Apart from federal law, it is a good idea to research state and local law. There may be other protected classes depending on local regulations.
As you create your rental ads, avoid using language that could be defined as discrimination, such as saying that you will not rent to seniors or people with children or that you won’t rent to those who live on government assistance. Then, as you take applications and screen renters, fairly assess your applicants based on the information they provide and not on other criteria. By maintaining professionalism and following an unbiased screening system, you can prevent discriminating against any potential renters.
Understanding Reasonable Accommodations
Additionally, it is vital not to assume that someone with a disability isn’t always a good candidate for your rental property. Under the Federal Fair Housing Act, are require Layton property managers to make “reasonable accommodations” for their renters if requested. By definition, a reasonable accommodation is “a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling.” If your prospective renter otherwise meets the criteria for renting your property, accommodation should not be a reason to deny them. The accommodation a renter requests would be paid for and installed by the renter, with the agreement that they will restore the property to its original condition upon move-out.
Other accommodations include permitting service and emotional support animals in the rental property, even if you have a clear policy disallowing pets. Service and emotional support animals are excluded from a rental pet policy. You may not pay additional rent or fees should a renter keep a service animal on the property.
It could be challenging to learn all the laws and best practices for leasing rental properties. Why not hire a professional property manager to do this essential role? At Real Property Management Northern Utah, we give honest and anti-discriminatory screening and leasing services to help our rental property owners locate the best possible renters. Contact us today or call us at 801-546-1770 to learn more.
Originally published on June 4, 2021
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
