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.
