How To & How Not To Lease Out Your Phoenix Home?
January 21, 2010
How rental property nightmare stories are born. Usually from a lack of forethought and knowledge.
Instead of selling many property owners have opted to lease, many new investors have also purchased properties with the intent to lease them out. This has prompted many questions about leasing and some after the fact concerns.
One very troubling call was from a long time owner who decided to lease the property and has active issues with the tenants: late payments, un-authorized occupants and general rudeness from the tenant. This is starting to sound like a rental nightmare and it could be, because the wrong done here, has only begun.
The lease, as was discovered, was one the owner pulled up from the internet from Australia. I'm sure Australia has different rules and laws regarding the tenant/landlord relationship. The lease is a binding legal contract. The use of a lease from out side the U.S.A is an issue just as it is an issue to use one from a different state.
You can't just pick any lease and use it if it just looks good. It is probably better to have no lease then the wrong lease. Having no lease simply means you both abide by the Arizona Landlord and Tenant Act, a much simpler proposition then what could be very complicated issue with the other lease.
The other missing items. There is no lead based paint disclosure signed for a property built before 1978 and the owner failed to have a pool disclosure signed. Was there a move-in inspection done? No. With an uncooperative tenant this could be really messy and very much not in favor of the landlord.
If you are a new landlord, before you sign up on this adventure treat it like a business and find out how it works or hire a professional to handle the leasing.
There are several places to start. Begin by reading the Arizona Landlord and Tenant Act. Then get a lease that is relevant to Arizona from a lawyer for instance: a good place to start. or your Realtor may use the AAR forms. Other things to consider, HOA rules, Mold Disclosures, Tenant Screening, Rental Taxes.
What ever you do, don't lease and don't sign legal documents until you know their consequences, because it is from cases like this that rental nightmares are born, and they don't need to be. This can be a very easy and lucrative business.
