Proper legal processes and documents help investors minimize risk choosing real estate in Detroit. Without these processes, it is a challenging endeavor. When managing properties, enforcing on-time rental payments and the rules with renters starts with a well-written lease agreement.
What do rental property owners need to know about creating (and enforcing) airtight leases? When you invest in Detroit property, work with a property manager and follow these tips to develop stellar leases that protect your properties (and income)!
Eliminate Any Chance for an Error
When you are in the business of investing in real estate, you want to be sure you eliminate any opportunity for error in your legal documentation. With mistakes comes the potential for investors to fall victim to frivolous lawsuits and other legal situations that damage long-term income from a real estate investment. With a custom lease agreement for your specific Detroit properties, you have the opportunity to reduce the potential for errors and protect your investments.
Contracts with general language leave your rental property business open to mistakes, varying interpretations of the rules, gaps, and shades of gray. Property managers can help you get specific with your contract language. A solid lease includes specifics about rent collection, security deposits, seasonal maintenance and repair responsibilities (for the owner and renter), and more.
Loopholes Exist in the Lease Templates
Ask anyone that relied only on free or downloaded lease templates in the past; they will tell you there is plenty of potential for gray areas without the right insights and guidance to eliminate them from a template! Legal lease agreements must follow the laws of the city of Detroit and the state of Michigan. When looking at opportunities to invest in Detroit property, rental property owners be aware of these regulations and understand that a free download might not cover your bases or comply with required laws.
When you have language in lease agreements that is too general, you run the risk of loopholes that renters can (and will) exploit. If a lease template doesn't include rules or rent payments specific to your property, you're left without legal documentation to enforce late fees for past-due rent or penalties for property damage and other violations.
Starting with a template can help you with the basics of a lease agreement, but make sure the lease includes custom and specific terms to strengthen it—with the oversight of a lawyer and property manager.
Work With a Lawyer
Following the law is a smart way to build a successful real estate portfolio in Detroit! Ensuring compliance with local, state, and federal laws to operate rental properties protects your investment income and allows you to keep operating as a property owner in our city.
When you begin creating lease agreements, we recommend that you work with experienced property managers and consult a lawyer. The right legal counsel understands lease agreements and how to protect your properties in the city of Detroit. They'll identify loopholes or information missing from your lease that puts your properties and income at risk.
Benefits of a Property Manager
Rental property owners know that to invest in Detroit property is an excellent opportunity to create tremendous cash flow and build more long-term wealth! Not only will the best property management companies allow you to benefit from investment income (without doing any of the work required to maintain properties), they also help protect your investments in various ways.
From creating strong lease agreements to chasing down late rent payments and enforcing the rules, your property manager also handles the renter screening and leasing process from start to move-in day. Hiring a Detroit property manager can give you peace of mind about your lease agreements and the quality of renters living in your rentals. With the right property manager in place, investors minimize the risk of loopholes, leases that don't meet legal requirements, and potential lawsuits from renters who take advantage of poorly constructed leases.
Invest In Detroit Property and the Protection of a Stellar Lease
You can do many things to make your opportunity to invest in Detroit property successful—but a faulty lease can deplete income and lead to costly legal problems. To maximize the revenue from your real estate investment opportunity and protect investment income, let the right professionals assist you with custom lease agreements that suit your needs, follow the law, and protect your properties.
Own It Detroit understands the critical need for airtight leases that hold renters accountable and protect investments for rental property owners. Our seasoned professionals stay up-to-date on all laws and best practices to generate strong leases for every rental property in your portfolio—whether you own one or two properties or enjoy income from a significant number of rental homes. If your lease isn't delivering enough protection and your leasing process is a challenge for every new renter, connect with one of our real estate investment professionals to learn how we can help!
Learn more about protecting your properties and income. Download your free copy of "Protecting Your Investment Property: A Guide."