Minimize your risk while increasing your cash flow
Tip 1: TAKE THE TIME TO THINK. Understand what you're getting into when you start on your path as a rental housing provider. Think about the pros and cons. Talk to others who have been landlords. Envision what relationship you want to have with a tenant. Try to know before you hit "go!"
Tip 2: ACT LIKE IT'S A BUSINESS. It's important to treat being a landlord as a business. Start by setting up a separate bank account. Consider using an expense and income tracker (like Quickbooks). Be prepared to file Schedule C on your taxes. Get the proper licensing with the city and know what taxes must be paid.
Tip 3. KNOW WHAT YOU'RE DOING. A considerable number of rules regulate even the smallest of landlords. Take the time to know the particulars before you jump in and find a tenant. Check with BPOA for all the proper documentation, forms, and information.
Tip 4. RECOGNIZE THAT TENANTS HAVE A LOT OF RIGHTS. In Berkeley, tenants have considerable rights. Both from eviction and from rent increases. Know whether your unit is subject to rent control or eviction protection regulations before you rent. If you want to reclaim the unit at a future date, be aware of when you can and when you can't and any additional costs you may incur to do so (like relocation fees).
Tip 5. USE PROFESSIONAL FORMS. It's important that you use a lease and other required forms that are supplied by someone that knows the law. They're certain requirements for Berkeley, and general forms by Nolo Press or other non-specific resources won't have what you need.
Tip 6. GO WITH YOUR GUT. Choosing a tenant requires strong rental criteria, a good rental application, and a
quick check with your gut. You may even be sharing common space with the tenant, so choosing wisely is critical.
Tip 7. KEEP A PAPER TRAIL. Everything you do (including communications with your tenant) should be documented. If you have a verbal conversation, follow it up with an email or letter summarizing what you spoke about. Be as clear and concise as possible so all parties are on the same page.
Tip 8. CALL ON THE EXPERTS. Know when it's time to bring in the experts. Whether it's a property manager or a lawyer, don't try to cut corners by making a guess. Talk with the right people to get it done right the first time.