Fair housing is not a sexy topic for real estate investors.
Personally, I prefer to talk about return on investment and investment strategies, but alas, like all things in life – the right to create financial freedom with real estate comes with some responsibilities. Chief among those is compliance with Federal, State and Local fair housing laws.
Our discussion must include coverage of the “silly season” which I define as a phase of life where rational behavior is countered and overcome with irrational actions based on vendetta’s or out-right childishness.
With that said, use these tips to ensure high speed wealth accumulation (now that IS sexy):
Download Your FREE copy of ‘How to Rent Your House!
Renting your house is a great way to enter the world of real estate investing, but most first-timers (understandably) have a lot of questions. Fortunately, the experts at BiggerPockets have put together a complimentary guide on ‘How to Rent Your House’. All the skills, tools, and confidence you need to successfully rent your house are just a mouse-click away.
1. Get Educated on the Basics
This area is not overly complicated but important to handle before you jump into the real estate game. First a question to give you a head start?
Question: Can I rent to only single tenants?
It surprised me when I first learned of the fair housing law scheme but that is NOT allowed. The Fair Housing Act also recognizes other protected classes:
- National Origin/Ethnicity/Ancestry
- Familial Status (having children under the age of 18 in the home)
Note: While omitted from the current Federal law, sexual orientation is protected in various jurisdictions.
2. Create a Written Policy that you Follow and Review Annually
I suggest even though you may only plan on one rental property, including a written policy that is included in all your applications and collateral material. Lets face it some people are strait whacked. It just takes one weirdo with an axe to grind to make your life miserable. If you document your policy and have signatures that show said wacko acknowledge you follow fair housing laws will go along way to shutting down the silly season.
3. Create a Record Keeping System
This one is my Achilles heal.
I hate paper- but the importance of this however cannot be overstated. Keeping a written record of your database of applicants and tenants can demonstrate fair application of your policy.
However, if you don’t have records to prove your compliance it exposes you to a lot of headache and even payment of a “Dave Ramsey style stupid tax.”
4. Educate your Team or Ensure your Property Manager has a Solid System
This one is a great way to show compliance.
Have your team attend a training and document a memorandum where they sign and agree to adhere to your policy. Look for the same in a property manager. In fact if they don’t have this…RUN. A professional property management company should have this aspect locked down tight.
If you followed the above four tips your going to be in great shape. Sure, someone may make a claim because they are mad at life and have decided to take it out on you. It will likely happen over time if you are in the game long enough. However, don’t worry, as long as you document your process and comply.
So what do you think? Any experience in using a well documented system to end “silly season?”
Photo Credit: Anna Fischer