First time landlord

[Bhaumik Kanani]

Hello,

I need some important advice before I rent out my house in Los Angeles county. I bought house 2021 and rented it for few months but had really bad experience with tenants. They did not pay penny for 6 months and ran away when I filed for eviction. I lost 6 month rent and lawyers fees. Before I rent out house one more time. I need some important advice.

1) Full proof solid lease terms which gives me a best shield from bad tenants.

2) Looking for some cost effective management company too which is providing value addition services. 

3) Insurance information in case of eviction which gives me cover from paying lawyers out of pocket.

4)  Is it really worth to be landlord in Los Angeles county?

5) Are all laws in favor of tenants only? I came to know that being landlord is like worst business. Is it true? Is there any leverage for landlord?

6) How can I make landlord business profitable? 

Any advice is appreciated. I do not want to put my self in same situation again. Just came out of dark time with bad tenants situation.

[Chris Seveney]

Quote from @Bhaumik Kanani:

Hello,

I need some important advice before I rent out my house in Los Angeles county. I bought house 2021 and rented it for few months but had really bad experience with tenants. They did not pay penny for 6 months and ran away when I filed for eviction. I lost 6 month rent and lawyers fees. Before I rent out house one more time. I need some important advice.

1) Full proof solid lease terms which gives me a best shield from bad tenants.

2) Looking for some cost effective management company too which is providing value addition services. 

3) Insurance information in case of eviction which gives me cover from paying lawyers out of pocket.

4)  Is it really worth to be landlord in Los Angeles county?

5) Are all laws in favor of tenants only? I came to know that being landlord is like worst business. Is it true? Is there any leverage for landlord?

6) How can I make landlord business profitable? 

Any advice is appreciated. I do not want to put my self in same situation again. Just came out of dark time with bad tenants situation.

 1. Get that from an attorney

2. Cost effective management company may be what gets you in this mess. Go with a really good PM so you can avoid this issue again.

3. There are some insurance programs out there that cover deposit and lost rent. I do not believe they are cheap and typically they need to be in bulk not one offs.

4. This is based on your appetite for dealing with being a landlord. 

5. Depends on where you are renting. Some places are tenant friendly, some landlord friendly.

6. This is not a question that can be answered in one post. Why do you want to be a landlord? There are many asset classes within real estate where you can invest and not have to deal with being a landlord. There are syndications, private lending and other things you can do that would be less headache.

[Nathan Gesner]

Chris nailed it. The cheapest property manager isn't the one that puts the most money in your pocket. You are operating in a difficult state and need a real professional working for you. Pay now, or pay later.

The lease terms are important, but screening is far more important. If you have a bad tenant, they won't care what terms are in the lease.

Laws are not always in favor of the Tenant, but some states make it feel that way. California is the worst of all the states, by far. NOLO has a great book, "Every Landlord's Legal Guide" that gives practical advice, sample forms, and points you straight to state law. Get this: they have one book to cover 49 states and a separate book to cover California. That speaks volumes.

[Erik B.]

Sounds like your place is vacant?  This is good. Now you can raise the rent to market.  Keep in mind, that most tenants are good people just trying to find a safe place to live and raise their family.  Make sure you set high standards for your applicants in terms of credit score, background, and referral checks.  Verify everything.  Go the extra mile.  Also, charge high application fee and security deposit. 

I'm not a lawyer but I'd definitely check with one.  Joining the California Apartment Association and Apartment Owners Association and network with the landlords and investors in the 60s and 70s who have huge portfolios and real experience that really understand your market and how to navigate it's challenges. Latch on to them.  

[Drew Sygit]

@Bhaumik Kanani

1) There is no perfect lease that will protect you 100%. Hire a great PMC

2) You get what you pay for

3) Depending on type of property you have, some PMC's will guarantee their tenants and cover these costs

4) How many landlords are there?

5) Several southern states are very landlord friendly

6) Get better at it!