Landlord
1031 Exchange
Absentee Landlord
Abstract of Title
Adjustable Rate Mortgage (ARM)
Adverse Possession
After Repair Value (ARV)
Amenity
Amortization
Appraisal
Appraised Value
Appraiser
Appreciation
APR
Assessed Value
Asset Protection
Bad Title
Balloon Mortgage
Bank Owned Property
Broker
Broker Price Opinion
BRRRR
Buy and Hold
Buyer’s Agent
Capital Expenditure
Capital Gains Tax
Capital Improvement
Capitalization Rate aka "Cap Rate"
Cash Flow
Cash On Cash Return (COCR or CRR)
Cash-Out Refinance
Cash Reserves
Certificate of Title
Certified Commercial Investment Member (CCIM)
Chain of Title
Clear Title
Closing
Closing Costs
Cloud on Title
Co-Borrower
Commercial Real Estate (CRE)
Comparative Market Analysis (CMA)
Consumer Price Index
Contingency Clause
Contract For Deed
Co-Tenancy Clause
Covenants, Conditions & Restrictions (CC&R)
Curb Appeal
Debt Service Ratio (DSCR)
Debt-to-Income Ratio (DTI)
Deed
Deed Book
Deed Of Trust (DOT)
Default
Deficiency Balance
Delinquent
Depreciation
Downturn
Dual Agency
Due On Sale Clause (DOS)
Earnest Money
Easement
Effective Gross Income
Egress
Ejectment
Eminent Domain
Equity
Equity Stripping
Escrow Agent
Escrow Agreement
Estate
Eviction
Fair Housing Act
Fair Market Rent (FMR)
Fair Market Value (FMV)
Federal Housing Administration (FHA)
Fee Simple
FHA Loan
First Mortgage
Fix and Flip
Fixed Price Purchase Option
Fixed Rate Mortgage
Forced Equity
Foreclosure
For Sale By Owner (FSBO)
Fractional Ownership
Freddie Mac
Gentrification
Gift Of Equity
Ginnie Mae (GNMA)
Graduated Lease
Gross Rent Multiplier (GRM)
Ground Lease
Hard Money Lender (HML)
Hard Money Loan
Hazard Insurance
HELOC
Holding Costs
Home Appraisal
Home Equity
Home Equity Loan
Home Inspection
Homeowners Association (HOA)
Home Warranty
House Hacking
Housing Starts
Individual Retirement Account (IRA)
Inflation
Ingress
Interest
Interest Only Loan (I/O)
Interim Interest
Internal Rate Of Return (IRR)
Intestate
Joint Tenancy
Joint Tenants
Joint Venture (JV)
Judicial Foreclosure
Jumbo Loan
Landlord
Land Trust
Land Value
Lease
Lease Option (L/O)
Lender
Lessee
Lessor
Leverage
Lien
Lien Waiver
Line Of Credit (LOC)
Listing
List Price
Live-in Flip
Loan Estimate
Loan Policy
Loan-To-Value (LTV)
Market Value
Maximum Allowable Offer (MAO)
Mortgage
Mortgage Broker
Multi-Family
Multiple Listing Service (MLS)
National Housing Act
Negative Equity
Net Operating Income (NOI)
Net Worth
No-Appraisal Refinancing
Note
Offer
Open House
Open Listing
Owner Occupied (OO)
Personal Use Property
PITI
Pocket Listing
Power Of Sale
Pre-Approval Letter
Private Mortgage Insurance
Probate
Proof Of Funds
Property Manager
Quiet Title
Quitclaim Deed
Real Estate
Real Estate Agent
Real Estate Broker
Real Estate Owned (REO)
Realtor
Recession
Refinance Rate
Refinancing
REIT
Rent To Own Homes (RTO)
Repair Costs
Reserve Fund
Residential Rental Property
Return On Investment (ROI)
Reverse Exchange
Reverse Mortgage
Rural Housing Service
Sales and Purchase Agreement
Security Deposit
Seller-Financed Sale
Seller-Paid Points
Shared Equity Finance Agreements
Short Refinance
Short Sale
Squatter
Sublease
Syndicate
Syndications
Tax Lien
Tenancy In Common
Tenants By Entirety
Tenement
Timeshare
Title
Title Commitment
Title Defect
Title Insurance
Title Search
Triple Net Lease (NNN)
Truth In Lending
Turnkey
Under Contract
Underwriter
Unsecured Loan
Use and Occupancy
Vacancy Rate
Voluntary Foreclosure
Waiver
Warranty Deed
Warranty Of Title
Workout Agreement
A landlord is a person or organization that leases real estate they own to another individual or organization in exchange for rent. Landlords and renters can be individuals, businesses, or other organizations. Renters are also called tenants.
Landlords collect rent from tenants, and they can evict tenants who fail to pay rent. But a landlord must ensure their rental property remains habitable while occupied by a renter.
In most states and cities, a landlord’s rental property must meet a standard called the implied warranty of habitability. This legal guideline states that a landlord must provide a rental unit that’s safe and livable for their tenant.
Landlord-tenant laws govern the relationship between a landlord and their renter. These laws vary by state and city.
Are All Real Estate Investors Landlords?
Real estate investors are not the same thing as landlords.
Landlords are property owners whose primary business goal is making money by collecting rent. They want to maximize their revenue. To do so, they limit their costs by handling the management of their rental properties themselves.
A landlord may hire a professional, such as an electrician, to repair their rental property. They may also pay a property manager or property management company to oversee their business. Alternatively, they might provide that service themselves, thereby reducing their costs and increasing their profits.
Real estate investors, however, focus on earning money by owning and selling property. Some real estate investors may rent their property while they own it, but doing so is a short-term tactic. For example, an investor may rent a condo for a year while they wait for their local housing market to improve.
A real estate investor who rents their property almost always hires a property manager or property management company to run things. Doing so allows the investor to focus on growing their real estate business, not managing rental properties.
Sometimes a real estate investor’s only goal is to cover the property’s monthly mortgage payment. They’re willing to pay someone to manage their rental property so they can focus on their business goal of growing their real estate investment business.
Understanding Rental Agreements
A lease, or rental agreement, defines the terms by which the landlord rents their property to the tenant. Items usually listed in a lease include the property’s security deposit, the amount of rent owed by the tenant, and the length of time for which the agreement is valid.
At the end of a rental agreement, a landlord can choose not to renew the contract, and eviction isn’t necessary. If a tenant refuses to vacate the rental property at the end of their lease, though, the landlord will need to evict them. (Keep in mind that instances of a renter failing to leave a property at the end of their rental agreement are rare.)
In most states, a landlord can choose not to renew or extend a tenant’s lease for any reason. Landlords are usually required to provide the renter with at least 30 days’ written notice if they’re opting not to renew a rental agreement.
Eviction Laws for Landlords
Landlords can evict tenants who violate their rental agreements, or lease. Eviction means a landlord removes a renter from the rental property.
Most evictions occur before the end of the renter’s lease. Failure to pay rent is the most common reason a landlord evicts a tenant.
But landlords must adhere to their local eviction laws. It’s crucial to note that eviction laws and procedures vary by state. For example, New York requires landlords to provide renters with an eviction notice at least 14 days before eviction, while Texas only requires three days' notice.
Most places require landlords to keep rental properties safe and livable for their tenants. If they don’t, the landlord might find it difficult to evict the renter, even if the tenant fails to pay rent.
Landlords also can’t discriminate. The federal government, via the Fair Housing Act, protects tenants based on race, color, national origin, sex, religion, disability, and familial status. Landlords can’t choose to evict someone because they fall into one of these protected classes.
Landlords can’t evict a tenant as retaliation. Let’s say a renter reports a landlord to their local housing authority for violating building codes. The landlord can’t conduct what’s called a retaliatory eviction.
The best approach is for landlords to reduce the likelihood of eviction, starting with tenant screening. This step is part of the rental application process. It involves a landlord reviewing a potential renter’s credit score, credit history, and verifying their income. The goal of tenant screening is to ensure the renter poses less risk to the landlord.
Note that the Fair Housing Act applies during the rental application process. Landlords cannot refuse to rent to someone based on the protected classes listed above. And some states extend those protections to others. For example, California prevents discrimination based on a tenant’s source of income and sexual orientation.
Important Tenants’ Rights to Know
Most states extend legal protections to tenants, though landlord-tenant laws vary by location. Below are the tenants’ rights that are applicable in most places.
Tenants have a right to privacy. This right means landlords have to abide by other state and federal privacy laws. And it governs how landlords access a rental property while a tenant occupies it.
Most laws provide guarantee landlords access to their rental units for three reasons:
- To make repairs.
- To respond to an emergency.
- To show the property to prospective tenants or buyers.
Tenants aren’t usually allowed to keep landlords out of the rental property if the landlord needs access for any of the above reasons. But landlords must give at least 24 hours’ notice to renters before entering the property. The exact length of time varies based on the state.
If the landlord provides the required notice, they can enter the rental property even if the tenant isn't home.
This rule doesn’t apply if there’s an emergency. If there’s a gas leak, for example, a landlord has permission to access their property without prior notice to address the issue.
Tenants also have the right to a safe, habitable rental property. This rule means landlords must maintain their rental units, including making repairs as needed. Tenants who feel their landlords aren’t adhering to this standard have a few options. They can:
- Handle the repairs themselves and deduct the cost from their rent payment.
- Withhold rent until the landlord addresses the problem.
- Terminate their lease without penalty.
- Sue their landlord.
- Report the landlord to local authorities.
- Pay partial rent until the issue is resolved.
Some specific laws and regulations protect tenants’ rights. These laws vary by state, so it’s necessary to know what applies where your rental property’s located. When in doubt, consult an attorney.