learn more about depreciation<\/a> at the IRS).<\/li><\/ul>\n\n\n\nThere are a few things to note here. First, any remodeling or improvements cannot be deducted outright, but they can be included in your cost basis for depreciation. Secondly, for depreciation, the value of the land cannot be included, since land cannot be \u201cused up.\u201d Also, depreciation can only be assumed for 27.5 years.<\/p>\n\n\n\n
Talk with an accountant to learn more about your tax situation.<\/p>\n\n\n\n
Troubleshooting tenants: FAQ<\/h2>\n\n\n\nWhat if mold is found in the property?<\/h3>\n\n\n\n Mold is a hazard and must be fixed promptly. In most cases, you as a landlord are responsible for remediation and repairs, and you could be responsible for your tenant\u2019s temporary housing costs if they cannot live in your property during the process. However, if you can prove that the mold was caused by tenant negligence, they may be responsible for damages.<\/p>\n\n\n\n
What if my tenant won\u2019t pay rent?<\/h3>\n\n\n\n Not paying rent is a serious offense. Always start with a conversation, and be firm about your expectations and the subsequent consequences. The bottom line? You need to nip that in the bud immediately.<\/p>\n\n\n\n
States differ on the exact process, but it usually involves issuing a pay-or-quit notice, which usually gives between three and 14 days to pay up.<\/p>\n\n\n\n
What should I do about tenant-on-tenant harassment?<\/h3>\n\n\n\n This can be a nuanced problem. Verify the claims and, if true, evict the harasser\u2014or you could be held liable.<\/p>\n\n\n\n
What is an \u201cuninhabitable living situation\u201d?<\/h3>\n\n\n\n While there may not be a firm legal definition, the generally accepted idea of \u201cuninhabitable\u201d implies a sense of danger. Any condition that would harm a tenant would be deemed uninhabitable. This could include broken windows, pest infestations, unlockable doors, electrical issues, bad air quality, and more.<\/p>\n\n\n\n
Should I rent to family or friends?<\/h3>\n\n\n\n <\/p>
Not a month goes by that I don\u2019t get a call from a friend or family member asking if I have any place available for rent. My answer is always the same: No. As part of my 7 Deadly Sins of Real Estate Investing, renting to family or friends is one of the most common but disastrous mistakes many new landlords make.<\/p>\n
I didn\u2019t know this when I first began, and ended up renting to several close friends and even some family. Each time, I was faced with a choice: Get screwed over or lose the relationship. Every time I chose to get screwed over in order to preserve the relationship. I finally had enough and \u201cput it in the policy.\u201d No more stress.<\/p>\n\n\n\n
Should I accept rent in cash?<\/h3>\n\n\n\n No. Never. Nope. I know in the story at the beginning of this post I said I did it. And it screwed me over, many times. No more. Don\u2019t do it.<\/p>\n\n\n\n
Can I be a landlord with no money?<\/h3>\n\n\n\n Yes and no. If you\u2019re asking, \u201cCan you invest in real estate without your own money,\u201d there are definitely a lot of ways to do that. In fact, I wrote an entire book on that topic called The Book on Investing in Real Estate with No (and Low) Money Down<\/a><\/em>. Check it out.<\/p>\n\n\n\nBut that said: Once you learn how to be a landlord and begin managing your rental property investments, you\u2019re going to have tough months. Maybe the water heater goes out and needs to be replaced. Maybe your tenant can\u2019t pay rent and you have to evict. Stuff happens. So it\u2019s vital that you have reserves as a real estate investor\u2014aim for at least six months of your monthly mortgage payment in reserves.<\/p>\n\n\n\n
Do you need a license to be a landlord?<\/h3>\n\n\n\n Possibly. Many cities may require you to obtain a permit to operate a rental property in the city. So while you aren\u2019t necessarily \u201clicensed to be a landlord,\u201d your property may need to be licensed. Check with your local city hall to see what the requirements for leasing properties are in your area.<\/p>\n\n\n\n
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