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If the idea of owning Lehigh Valley rental property sounds like an exciting and appealing proposition, you’re right, and you're not alone. There are plenty of incredible benefits to owning real estate, regardless of investment property type, like short-term vacation rentals, single-family homes for rent, or multi-family complexes. But the allure of new revenue streams can sometimes overshadow the inherent risks of being a landlord and renting out property. And without properly assessing the investment risks and landlord liabilities, you could be setting yourself up for a costly and less-than-seamless experience.
There are going to be liability issues worth considering and risks to weigh before jumping into your first investment property. Some can be more costly than others. And simply securing an insurance policy may not be enough. Today, we’ll outline a few of the most common landlord liability concerns and provide insights so you can prepare to make the best decisions moving forward. Identifying these risks will allow you to lay in the additional protections needed to protect your Lehigh Valley investment.
Criminal Activity Is a Landlord Liability
Not all criminal activity that takes place on or near your property will be your responsibility. But you should be aware of how criminal activity can impact your residents, your property and its marketability, and your bottom line. Theft, vandalism, and arson are all real threats to any property owner. And they represent an important risk to consider early on in your investment journey and before you even buy your first Lehigh Valley property.
Avoid High-Crime Neighborhoods
Before you buy real estate to rent, do your homework about crime in the area. Check the local stats and data resources of reported crimes in the last few years to spot trends, too. Of course, you can’t always predict when or where crimes will occur. But if you’re looking at property in a neighborhood with more prominent activity, it might not be a safe buy. You can reduce your risks by focusing on potential investments in lower crime areas.
Make Your Property Less Appealing for Criminals
If you’re looking to make your rental property safer, there are steps you can take to reduce your landlord liability and risks of attracting criminals. Keep your property well-lit, for example, with flood lights and motion sensor light fixtures to illuminate dark corners. Make your rental less appealing for thieves and vandals with the smart use of landscape lighting around windows and perimeter fencing, too.
Safeguard Your Property with Technology
Tap into all the latest innovations in doorstep camera technology. Your residents will feel safer, too, with alarm systems and new locking devices. These safety investments will help reduce your risks of landlord liability associated with criminal activity. And they’ll be marketable assets, great for attracting new residents.
Tighten Your Pre-Screening Process
While you’re protecting your investment from criminal liability issues, don’t forget to lay in the protections to avoid signing leases with criminals. Develop a robust resident pre-screening process that includes thorough vetting, credit history, and background checks. Any candidates with sketchy, recent transgressions can present higher risks to you as an owner.
Landlord Liability Risks Associated with Personal Injuries
Another significant risk to Lehigh Valley rental property owners are those claims associated with personal injuries. When guests, visitors, and residents injure themselves on your property, those injuries become landlord liability issues. You’ll carry insurance coverage to protect yourself. But there are other instances to know and tips for reducing injury risks.
Avoid Negligence Injury Claims
Maintaining the overall condition of your rental property is a top priority. But there are other benefits besides improving the looks, aesthetics, and condition of your investment. Ongoing maintenance, including routine property inspections, can help you stay ahead of negligence claims. Fixing a loose step or broken hand railing can be far less expensive than paying for the recovery of a resident who falls down your steps.
Routine Safety Checks
There are certain components of any home that are just more dangerous than others, like the electrical system. When you take the precautions now to schedule routine safety checks, you can bring in the professional contractors needed to stay proactive about those potentially dangerous property aspects. Verifying smoke and carbon monoxide detectors is also a pivotal part of this preventive maintenance process that can protect you and your residents.
Breaches of Habitability
Another landlord liability to consider involves breaches of habitability. As the property owner, you’re responsible for the structural integrity of the unit, as well as common areas. Examples of these breaches include fungal growth and pest infestations. To protect yourself from resident claims, take the steps to schedule pest inspections, mold inspections, and radon testing if you can. These measures will demonstrate your efforts to maintain habitability, thus protecting yourself from potential claims.
Pet-Friendly Lease Liabilities
For most rental property investors, the acceptance of pets is a tough decision because of the associated liabilities. In addition to potential property damage even small pets can cause, there are other considerations, including landlord liabilities. Here are just a few concerns that can arise when pets exist on your property:
Pet damage to physical property
Pet bites to other residents
Nuisance calls due to pet noise
Pet injuries to other resident pets
You may come to the conclusion that accepting pets and assigning pet-related deposits is the most lucrative way to go. Be sure to take all the steps necessary to protect yourself, including insurance coverage for pet-related incidents. Also, explore these tips for reducing your risks:
Meet pets in person to gauge the temperament yourself.
Consider investing in a pet screening service to review a pet’s past behavioral history.
Require residents to have renter’s insurance.
Enact transparent guidelines and strict reinforcement of those guidelines concerning incidents or reports that suggest a pet becomes hazardous.
Financial Liabilities to Know
In addition to the aforementioned risks and landlord liabilities, you should also lay in protections for your financial health to safeguard against monetary liabilities. Lehigh Valley rental property owners know there could be disagreements or payment violations that result in evictions. And not every resident engagement is going to be a seamless transaction. But you should be prepared for financial claims or lawsuits regarding discrepancies in rent amounts, applicable fees, or non-refundable deposits. Stay proactive by partnering with a legal professional who can help you anticipate issues before they arise. An experienced real estate attorney can review and revise your lease agreement, help develop an eviction process and timeline, and handle resident claims in court.
Work with a Rental Property Management Partner
When you look at all the potential risks and landlord liability issues that could arise, you might feel overwhelmed. Don’t be. The best way to help you prepare and protect your investment is with a property management partnership. Axel Property Management can help you see around corners and anticipate pitfalls. We can also help you lay in the protections you need, from advice about insurance coverage to lease verbiage and maintenance. Reduce your risks at every engagement and let our team of professionals guide your efforts ongoing.
Contact Axel Property Management and let us shed light on your landlord liability issues, along with all the insights, resources, and tools you need to avoid them.
