According to the Daily Mail, new home listings were at their third-lowest level on record as of early 2023. These numbers are due to the enormous rise in accidental landlords as people are hesitant to sell their property due to the potential of its investment.
However, starting on this journey can be stressful, especially in a location such as Washington, DC, where the unique laws and regulations strongly favor tenants.
With these property management tips, you can safeguard your investments and prevent liability. So, read on for practical real estate investment tips when becoming an accidental landlord and ensure your income doesn't come with unwanted challenges.
Familiarize Yourself With DC's Rent Control Laws
You must understand the laws in DC regarding rent control when you become a landlord, as the Rental Housing Act of 1985 applies to most rental properties bought before 1975. The act caps annual rent increases based on the government's Consumer Price Index (CPI) to ensure a fairer opportunity for tenants.
Falling foul of this law can result in severe penalties, so ensure you do not increase your rent too fast and keep all paperwork related to this in order.
Before you leverage your new rental, you must register with the Rental Accommodations Division (RAD). This group oversees the Rental Housing Act and requires you to submit ownership paperwork regarding your property to them before you start renting. They may even be able to inform you if your location is exempt from rent controls, offering you additional freedoms.
Handle Security Deposits the Right Way
Security deposits in DC have a very clear limit and cannot exceed one month's rent. These must also enter a DC-based, interest-bearing escrow account, preventing you from accessing it without due reason, and you must provide tenants with information on the interest accrued and its location should it move.
In general, landlord management strategies should help you avoid problems related to returning deposits to tenants. Failure to return the full amount owed can leave you liable for tenant litigation, which can cause long-term problems.
Keep Your Property in Line With Housing Codes
When renting it out, your property must comply with DC's strict housing codes. These encompass many areas of home upkeep, including:
- Preventing mold growth
- Removing and avoiding pest infestations
- Maintaining utilities
- Ensuring tenants have access to heating and plumbing
- Installing smoke detectors and other safety equipment
- Repairing cracks and leaks
The above list is not exhaustive, and it may benefit you to work with a professional property manager to ensure your location is always up to code.
Washington, DC Rental Advice Tailored to Accidental Landlords
Complying with areas like rent control, property registration, and maintaining a home can take a lot of your time and effort when you have recently joined the ranks of accidental landlords. Not keeping up with them, however, can lead to costly penalties.
To help you stay up-to-date and compliant, PMI D.C. Metro can provide seamless property management that matches your specific needs. Take control of your new rental by talking to us and discovering what we can do to take the most challenging aspects off your hands. Contact us today to find out more.
