Obtaining and owning single-family rental properties can be a fun and successful investment. Unlike other types of investments, there are several aspects you must be aware of to successfully go from a property owner to a landlord. Suppose you are an Eden Prairie rental property owner getting ready to lease for the first time. In that scenario, it is important to fully understand the basics of leasing strategies and, even more importantly, the laws that now apply to you and your renter. We’ve put up a comprehensive guide to get you started on leasing your first property. Implementing these basic guidelines can make your first experience a successful one.
Renter Screening Process
One of the first and most necessary actions in leasing your rental property is picking the right renter. And the approach to get that is to conduct a good tenant screening process for each applicant. You’ll be needed to gather information from your prospective renter, so you can decide whether they are the ones you’re searching for. At a minimum, you should ask them to fill out an application that includes all intended home occupants’ names and birth dates (involving those under 18), five years of employment history, and at least three past rental references. You’ll also need to take Social Security numbers for all adult renters and conduct a background check on each one. Then, call and verify the information on their application. If possible, speak to any previous landlords and get details on their renting history. It may take a while, but the more research you conduct before you sign that lease, the less likely you are to find unpleasant surprises in the future.
Avoiding Discrimination
As you advertise to and screen renters, it’s important to prevent discriminating against potential renters, even if you don’t mean to. Numerous federal laws make it prohibited to discriminate against a renter based on race, sex, color, national origin, religion, handicap, and familial status. These laws include:
- Fair Housing Act (FHA): The Fair Housing Act (FHA) is a federal law that prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, or disability. The FHA covers all aspects of the rental process, including advertising, tenant selection, and terms and conditions of tenancy.
- Americans with Disabilities Act (ADA): Also covered by FHA is a federal law that prohibits discrimination against individuals with disabilities. Landlords who own multi-unit buildings of 4 units or more are required to make reasonable accommodations for persons with disabilities, such as providing accessible parking spaces or adding grab bars in bathrooms.
- Age Discrimination in Employment Act (ADEA): The Age Discrimination in Employment Act (ADEA) is a federal law that bans discrimination against individuals 40 years of age or older. Although the ADEA is primarily created to protect employees, it also prohibits discrimination in housing on the basis of age.
- Equal Credit Opportunity Act (ECOA): The Equal Credit Opportunity Act (ECOA) is a federal law prohibiting discrimination in credit transactions, including rental transactions. Under the ECOA, landlords may not discriminate against individuals based on their race, color, national origin, religion, sex, marital status, age, or because they receive public assistance.
Aside from federal law, it’s crucial to research state and local law. There may be other protected classes depending on local regulations.
As you write your rental ads, avoid using language that could be interpreted as discrimination, such as indicating you will not rent to seniors or people with children or that you won’t rent to those who live on government assistance. Then, as you gather applications and screen renters, fairly assess your applicants based on the information they provide and not on other criteria. By keeping professionalism and utilizing an unbiased screening system, you can stay away from discriminating against any potential renters.
Understanding Reasonable Accommodations
In the same manner, it is imperative not to assume that someone with a disability is automatically not a good candidate for your rental property. Under the Federal Fair Housing Act, Eden Prairie property managers are bound to make “reasonable accommodations” for their renters, should they be demanded. By definition, a reasonable accommodation is “a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling.” If your prospective renter otherwise meets the criteria for renting your property, accommodation should not be a reason to turn them down. The accommodation a renter requests would be paid for and installed by the renter, with the agreement that they will send back the property to its original condition upon move-out.
Other accommodations include agreeing to service and emotional support animals in the rental property, even if you have a solid policy against pets. Service and emotional support animals are not incorporated into a rental pet policy. You may not pay additional rent or fees should a renter keep a service animal on the property.
It can be difficult to learn all the laws and best practices for leasing rental properties. Why not work with a professional property manager to perform this critical task? At Real Property Management Viking, we deliver clear and anti-discriminatory screening and leasing services to help our rental property owners find the best possible renters. Contact us today or call us at 612-230-3953 to learn more.
Originally published on June 4, 2021
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
