If your intuition tells you to stay away from rental property are not alone in this opinion. Many people whose real estate is the primary source of income often avoid to rent a property and do not consider it a smart business move. There is a very comprehensive list of legal regulations on the rules that the landlord has to respect. These rules concern how much rent can be raised, how often and under what circumstances. There is also a set of rules that strictly prohibit the eviction of tenants.
What further complicates the issue of renting the real estate is the diversity of standards and regulations between different cities and states. Compliance with all current laws related to real estate is not an easy task, especially in situations where the landlord rents real estates in several different communities.
There are several prejudices about rent control.
Real estate that is subject to different controls is cheaper than the usual market housing. Most people consider that this statement is true and they are definitely cheaper than market real estates. It is a standard idea that will help you initiate your business in the right foot.
This opinion is certainly valid to a large extent, but there are different circumstances that affect that the properties that are controlled rent at lower or equal prices.
This is another question that confuses people about Section 8. How is the rent's value determined? The rent is determined on the basis of how much the tenant can pay. That means that you should predetermine this step before delving into your rental plan and your strategy for the real estate market.
In the legislative system that regulates housing rental systems. These programs limit the amount of the landlord have legal rights to charge as well as how much he/she is obliged to pay (compared to the cost subsidized by an affordable housing program). This reality is not the case with rental units. Revenue or ability to pay does not affect whether it can provide a rented rental unit or how much the lessor has legal rights to collect the lease of his property. Rent is not related to the amount of revenue.
Some professionals also state that it is illegal to raise the rent of the tenant in a rent-controlled unit, but do not listen to this statement; this very often expressed opinion is simply not true. Although landlords are limited in the amount, they can raise for rent they can always do it. Some cities have laws which restrict rental rates to 5 percent a year or from 2 to 5 percent depending on the change in consumer prices. But there are cities that allow landlords to increase the amount of rent if the tenant capital is improved.
Last and final misconception about real estate renting: All rent-controlled properties are old and damaged. About that: Newer flats or general rentals are not covered by the lease law. For example, in California, any building or building that was built after 1995 does not fall under that law. What does not necessarily mean that such real estate is in a worse state than the newer and those who are subject to the law? Many of these laws cause senseless things such as allowing buildings to "collapse" by landlords in order to indirectly force tenants to leave their apartments.