Given the current high demand for rental residences and the poor return on stock investments, it is no wonder that so many homeowners are considering buying Jersey Shore real estate as a rental investment. While potentially a lucrative move, being a landlord is an active job, albeit a part-time one, and you, as a would-be investor, need to be aware of the responsibilities of such.
In essence, by becoming a landlord you are operating a business, making major decisions which can affect your family, setting and adhering to a budget, and spending time overseeing and maintaining the property. For a period of years, at least two and more likely five, you will be employed as your own property manager. You must then find a steady flow of good tenants, draw up leases, collect rents, make repairs, keep accurate records re: income and expenses, file taxes, obtain permits, find suitable insurance, and establish a workable relationship with your tenants.
You must also know–and follow–federal, state, and municipal health and safety codes and landlord/tenant rights and responsibilities. Simply put, your responsibilities as a landlord include the following:
- Make and keep property habitable
- Make and pay for repairs arising from ordinary wear-and-tear.
- Refrain from turning off utilities
- Provide written notice in the case of transfer of ownership
- Comply with statutes involving discrimination
Basic tips for becoming a successful landlord include:
- Have a carefully written lease, one that will stand up in court if disputes with your tenant cannot be resolved. Be specific; who mows the lawn/ who disposes of trash? Who pays for what?
- Know the law!!! Both you and your tenant have rights and responsibilities, and you need to be aware of all of them.
- Establish a friendly, fair, but firm relationship with your tenants. Treat them with respect and be forthright about your expectations.
Investing in Jersey Shore real estate has quite a few tax advantages, such as mortgage interest and property tax deductions, operating expense and travel write-offs, and the depreciation factor. Because you will be dealing with so many possibilities, it is a good idea to consult your tax attorney or CPA to avoid complications and ensure your highest deductible amount.