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Posted over 3 years ago

3 tips for Investing in a Tenant Friendly State

Oftentimes when investors are considering criteria for areas to purchase income properties in they’ll look for population growth, job growth, and landlord friendly states; to name a few. Landlord friendly states are states that tend to be more lenient towards owners whereas tenant friendly states tend to favor tenants in issues such as eviction, rent control and tenant rights. While investing in a tenant friendly state isn’t the most ideal, it can be done and with success. Here are 3 tips for investing in a tenant friendly state.

Screen Tenants Carefully

It’s always imperative to screen tenants thoroughly but in a tenant friendly state it’s even more crucial. This means every tenant fills out an application that includes information with

-current employer, length of employment and their managers contact information

    -current and previous addresses, length of stay, landlords and their contact information

    - income information

    Then you verify all of that information; confirm employment, speak with current and previous landlords. In addition to the application, you should run a credit report and background check. It’s important to understand the rules and regulations around tenant screening in your state and follow the federal, state and local fair housing guidelines for both screening and accepting or denying an applicant.

    Understand the Tenant Landlord Laws in Your State

    Understanding the tenant landlord laws in your state and also locally will help ensure that you’re following the rules and allow you to be prepared should you have to take action. You will want to pay close attention to eviction laws, personal property recovery rules, rent control, security deposit amounts and returns etc. For example, in NY the security deposit held cannot exceed one month’s rent and is required to be return within two weeks after the lease ends. If a landlord does not plan to renew a current tenants lease they must provide written notice at least 30, 60 or 90 days prior to the end of the lease depending on whether the tenant has rented the space for less than a year, between 1-2 years or greater than 2 years. The entire eviction process in NYS can take at minimum 6 months but I’ve heard of cases where it’s gone long beyond that.

    Have a Great Attorney

    It’s imperative to have a great attorney that can answer questions and guide you when issues arise. Since NY is a tenant friendly state we felt it was important to have a local real estate attorney draw up a lease that was appropriate for our area. While he wrote our lease, he was able to answer a lot of questions about different situations that we’ve experienced over the years. Now, we have a great lease that we know will help protect us and we have a relationship with an attorney. We have his email and cell phone number and he often answers questions and takes phone calls at no charge. A quick phone call with an attorney at the beginning may end up saving you time and money down the road, be sure you have one you can call.

    Owning properties in tenant friendly states can be done with success but it requires good processes including diligent tenant screening, a solid understanding of the local and state laws and regulations and patience. It’s so important to retain great tenants otherwise you may have to wait 6-8 months for an eviction to take place. That’s a lot of time without rent collection and possibly months of damages to have to correct along with a pile of legal fees. Personally, I would rather let a unit go vacant while I search for a great tenant than to quickly fill a vacancy and risk securing a bad tenant that will be difficult to get rid of.



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