What is a Landlord?
An Essential Property Management Term
A landlord is the owner of a house, apartment, condominium, or other real estate which is rented or leased to a tenant. That tenant could be an individual renter or a business, and in exchange for occupying the landlord’s rental property, they typically pay monthly rent payments. In property law, landlords are also referred to as lessors, whereas their tenants are lessees.
The Etymology of Landlord
In the modern world, “landlord” can feel like a pretty antiquated term. It’s not often that anyone is referred to as a “lord,” after all, and while “landlady” does exist to denote a female landlord, it’s not a very popular term. “Landlord” is used to refer to a person who rents out their property, often regardless of gender.
The term landlord derives from Old English landhlaford, which was the equivalent of “land + lord.” Unlike many modern terms, landlord has a very straightforward etymology.
Landlords have certain responsibilities they must carry out when they lease their rental unit to a tenant. Any time a property owner signs a rental agreement, they must abide by the Fair Housing Act as well as the Uniform Residential Landlord and Tenant Act, also known as URLTA, which was created in 1972. In additions to responsibilities, the URLTA outlines the legal rights of both sides, and is a key piece of legislation that every landlord should become intimately familiar with.
Under the URLTA, a landlord must:
- Keep all common areas clean and in safe condition
- Do whatever necessary to keep the rental unit in a habitable condition
- Comply with all building and safety codes
The URLTA also outlines responsibilities and rights of the tenant during an occupancy. Tenants must:
- Keep the premises clean
- Do not violate any neighbor’s right to the covenant of quiet enjoyment
- Use in a reasonable manner all electrical, running water, and other facilities and appliances
Differences Between a Landlord and a Property Owner
A property owner is a person who owns real estate, and that person is not necessarily the one to lease out the property or manage the landlord-tenant relationship. Many property owners buy and hold their real estate as an investment property, and want to generate the passive income that comes along with a long-term rental without dealing with the day-to-day tenant management like responding to maintenance requests.
In that scenario, a property owner may hire a property manager to find and manage tenants. Property management companies may manage hundreds or even thousands of rental units, depending on their size, and typically deduct their management fee as a percentage of the overall rental payments.
While a landlord is the property owner, they are typically not referred to as the property manager, since property managers only manage the rental process of a given rental unit and do not actually own it.
The DIY landlord is the type of property owner who chooses to manage the entire tenancy and tenant relationship on their own. These landlords often have a smaller number of properties and are more hands on with them, and this is the market of property owners that TurboTenant was created to serve.
How to Become a Landlord
On our blog, we’ve defined the 7 key steps to becoming a landlord. Broadly, they are:
- Buy a rental property, taking into account the local market and state landlord-tenant laws
- Gather documentation for move-in, move-out, landlord insurance, and landlord-tenant law
- Create a marketing plan, including great photos of your rental unit and an engaging listing description
- Screen prospective tenants according to fair housing laws
- Sign the written lease agreement, which should outline the terms of the lease, the security deposit, late fees, and what happens when there’s unpaid rent
- Manage tenants with clear communication, written notice of any changes, and clear expectations in order to avoid eviction proceedings or small claims court
- Be prepared for the end of the lease, when a tenant moves out, and start to search for new tenants
Perks of a Being a Landlord
Being a landlord is a fantastic way to generate passive income and prepare for a comfortable retirement. Real estate is one of the smartest investments you can make due to its tendency to appreciate in value, and when you rent out your property you benefit from that appreciation as well as consistent rent payments.
Once a rental property is profitable enough to cover its mortgage payments and any ongoing maintenance costs, many landlords get the itch to purchase more property. The more rental units you acquire, the easier it becomes find and retain great tenants.
Drawbacks of Being a Landlord
The drawbacks of being a landlord are similar to the drawbacks of running any business. And make no mistake: As a property owner renting out your real estate, you are running a rental business.
It’s a great idea to read up on both your state laws and federal laws, and to find a great lawyer who can offer you reliable legal advice. Evictions do happen, and can be quite costly for the landlord as well as the tenant. Bringing a sense of professionalism to every interaction with your renters is key to maintaining and growing your rental business, which is why you want to respond to communication within a reasonable time and be prepared for the unpleasantries like giving proper notice of rent increases.
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