According to a recent report, the Arizona housing market is thriving with expected growth in 2020. Given the market conditions, some property owners who are in the position to sell may be thinking of renting out their property. If you are wondering if you should take on the role of landlord for your Arizona property, here are some things to consider:
The Rental Market in Your Area
While many communities in Arizona are experiencing growth, it’s crucial to assess the conditions where you will be renting your property out. For instance, recently, the Phoenix housing market was reported to be one of the tightest in the country. With massive population growth and a high occupancy rate, Maricopa County is an excellent rental market. Tucson is also considered to be on the rise, and the student population of the University of Arizona campus helps provide a steady stream of renters during the Spring and Fall semesters. By consulting with a local real estate agent, you can learn more about the rental market in your area and make an informed decision.
Does it Make Sense Financially?
The idea of holding onto your property while it increases in value may seem appealing, but you need to assess whether it is realistic for you. If your home is paid off, then it may not be a problem to rent it out while paying for another residence. However, if you are still carrying a mortgage, paying taxes and insurance, and paying housing costs elsewhere, the rental income needs to do more than help you break even.
Maintaining a rental home costs money, and there may be months when you have to make expensive repairs, or the property will sit vacant. You could also have bad tenants whom you end up having to evict who damage the property or run off without paying rent. If you are not renting out at enough of a profit to cover some of these possible expenses, you may be taking a loss. You need to be sure you can realize enough from the investment to make it financially worth your while.
Assess How Much Work it Will Take
If you can afford to pay a management company to take care of your property, find good renters, collect rent, and manage repairs, then renting out your home may be a good investment. If you are just getting started as a landlord, you may want to save on this expense and take care of these types of details yourself. This can mean getting calls in the middle of the night about a broken air-conditioner or leaking water heater. You will also have to attend to routine maintenance matters and tenant issues. In short, being a landlord can be time-consuming and inconvenient, and if you plan on taking on these types of responsibilities, it’s crucial to know what to expect beforehand.
Are you Ready for the Legal Aspects?
In Arizona, home and apartment leases are governed by the Arizona Residential Landlord and Tenant Act. This comprehensive set of laws establishes each party’s legal rights and obligations to one another. As a landlord, you can be held liable for the failure to take certain actions. Likewise, you can pursue legal remedies against your tenant under certain circumstances. It is crucial to meet with an experienced Arizona real estate attorney to learn more about the legal aspects of becoming a landlord.
Attorney Laura B. Bramnick is an Arizona real estate attorney with the expertise to help you explore the different facets of becoming a landlord in Arizona. If you are seeking an exceptional, client-driven real estate lawyer in Scottsdale, Phoenix, Sedona and throughout the State of Arizona, contact Laura B. Bramnick to schedule your consultation.