SoS_16043_Protecting_Your_Assets

Most rental property owners suffer from tunnel vision; honing in on building wealth for the future and squeezing out every penny in cash flow now that they can. Unfortunately this frequently leaves them open to a variety of risks which can jeopardize their incomes and assets.

Many of the biggest threats come from tenants. Sometimes this is due to malicious tenants looking to work the system, some are seduced into trying to cash in on their landlords by others and in some cases it is a matter of Massachusetts landlords failing to educate themselves on the law.

Three areas in which Worcester area rental property owners frequently trip themselves up are rent increases, late fees and filing the right notices…

The Risks Landlords Face When Initiating Rent Increases 

Massachusetts landlords need to be very careful when approaching tenants about prospective rent increases or face legal action, being sued and even essentially being blackmailed into keeping rental rates static.

Those leasing single or multifamily properties in and around Worcester need to have a good grip on the law themselves, understand how various types of tenancy affect the ability to raise rents, which forms need to be used when, potential tenant actions and the best strategies for avoiding these situations altogether.

If planning to increase rents it is wise to ensure there is no possible code or sanitation complaints tenants can make or they may use this as an excuse to not only not pay the increase but withhold all rent. If not done correctly renters can claim it is a retaliatory move and take you to court. If you attempt to raise rents even 6 months after an issue with a tenant you may find the courts automatically rule against you, in their favor.

The best solution is to make sure all tenants agree to increases amicably in writing at least 30 days in advance.

Beware of Charging Late Fees & Filing Eviction Notices

As a landlord you must know when to use the 14 day or 30 day notice or face further trials. However, even when using the right notice recognize that illegally charging late fees or ‘discounts’ can land you in trouble and the chances are you may have to go through a lengthy court battle to actually get them out.

You can’t just refuse to accept rent even after notices are delivered in most cases and just because someone remains in one of your properties beyond their lease does not relieve you of your legal obligations to provide good housing for them under Mass. law. In fact they can still sue you for poor conditions and violation of the Sanitary Code, even if they are not supposed to be there any longer!

Your 4 Point Plan for Protecting Your Income

In order to avoid running into issues like the above and being sued or even just seeing rents stall those leasing multifamily apartment buildings and single family homes in and around Worcester need to be proactive and have a plan to protect their investments.

1. Know the law and your rights as a property owner

Knowing landlord-tenant law, your rights and renters’ rights in Mass. is a great start to preventing making any costly mistakes. Note that it is also important to have a system for keeping on top of regular changes in the law and proposed changes too.

2. Screen Thoroughly

Despite your best attempts you will surely make mistakes now and again, or will end up with a vindictive tenant who can make you look guilty even if you have done everything by the book. This is where superior tenant screening comes in to weed out the bad apples and get tenants who are willing to recognize when you have simply, accidentally made the wrong move.

3. Don’t be a Victim

Just like any other type of crime or scam malicious and opportunistic tenants will look for property owners who look like easy and attractive targets to victimize. You can do wonders to insulate yourself and make them keep looking elsewhere by not appear to be an easy victim. Use different entities to hold your investment properties so that no one can instantly look you up and find out how much you are worth. Also recognize that private landlords are seen as the easiest property owners to take advantage of as they don’t have the shelter of a full service property management company or likely a good lawyer on standby.

4. Hire a Full Service Property Management Company

Utilizing the assistance of a full service property management company can make all of the above easier. Let them use their superior resources for screening, let them stay on top of the law and protect your rights and act as a buffer and deterrent to scam artists.