Owning and renting out a rental property is more than just an investment; it’s a process. From your search for renters to the day of an unfortunate eviction or when they move out, renting out your rental property is a legal process that should be followed to the letter of the law—unless you want to face legal repercussions.
Finding renters
- Vet potential tenant before renting to them. It is legal to screen your prospective tenants, if you do it legally. Consult an attorney to ensure that your vetting process is legal and sound so you can avoid rental payments, property damage, and broken rental agreements.
- Get a legal rental agreement. Downloading a generic rental agreement off the computer can seem like a cheaper option, but can cause problems later. Instead, contact a local lawyer to get a legal rental agreement that follows the specific regulations of your state and area. Generic rental agreements can also place additional (and unnecessary) tasks on your to-do list.
- While you are screening potential renters, document the condition of your rental property. Take pictures of every room, as well as the exterior of the building. Make notes about any flaws (i.e. drywall damage, holes in flooring, etc.). Retain a file of the photos and notes for later reference in case of complaints or property damage issues.
After you find renters
- Don’t rent without a signed rental agreement. Meet with potential tenants and have them sign your rental agreement. Go over the terms of the agreement with the tenant, and provide the tenant with a copy of the signed agreement. Keep your copy of the signed rental agreement with the photos and notes.
- Be cautious about entering the rental unit. According to Wisconsin law, you cannot enter a rental unit without giving 12-hour notice. You may only enter the unit to inspect any problems and make repairs or to show the rental unit to prospective buyers or renters. The only exception to giving 12-hour notice is if there is an emergency or if the tenant gives permission for landlord entry.
When the renters give notice
- Know how much of a security deposit you can keep, and when. There are situations where landlords can keep the security deposit, or at least a portion of it. It’s important to know when you can retain a portion and how much so you don’t have to devote time and funds to legal problems later.
- Document dates. Depending on the terms of your rental agreement, you may be able to deduct the amount of unpaid rent from your security deposit. Document the date your tenants give notice. If the notice is delivered in person, let your tenants know what condition you expect of the unit after they move out.
When the renters move out
- Take photos of the unit after they move out. Once the unit is empty, take photos of the premises again. Those photos can be helpful in a legal proceeding later; file away your photos and documentation for easy reference later.
When the renters aren’t paying rent
- Don’t take any action without knowledge of the eviction process. If the renter gets behind on rental payments, don’t take any action (verbal or written) until you know your rights as a landlord. Even actions that seem common-sense can lead to legal issues. For example, if you are not sure if it is legal to evict a tenant, contact an attorney BEFORE you evict—and ask about the steps you need to take when you evict.