Have you found yourself in possession of a property that you won’t be living in?
At Niguel Point Properties, we work with a lot of accidental landlords. Usually, these are property owners who inherited a piece of real estate or who moved out of their own home, and instead of selling that property, they want to rent it out.
When you have become a landlord by circumstance and not by choice,
a property management company in South Orange County will be an invaluable asset for you. Diving into the rental market (or falling into it) without any prior experience or understanding of the laws and regulations is risky. We are here to protect you and your investment. We’re also here to help you make more money.
Navigating the challenges of being an accidental landlord can be complex, but we can keep things simple. Here are some of the things you’ll have to do, and some of the ways that we can help you.
When you’re renting out a home that
isn’t a property you carefully selected as a rental, there will be some attention that’s needed to make it ready for tenants. The rental market in South Orange County, CA is constantly shifting, and you’ll need to make sure it’s attractive to the renters who are looking for their next home.
You’ll want to start with an empty house. Leave the appliances if they’re in good condition (if not, replace them), but move out all the furniture and personal belongings. Tenants will want to see a clean, empty house so they can imagine moving their possessions into it. There are plenty of good reasons to rent out a furnished home, especially if it’s a short term rental or a property that you’ll offer to students or business people who are not renting for the long term. However, we generally encourage rental property owners to think about a lease term that’s at least a year, so you’ll want to offer an empty rental. Tenants will want to move in with their furniture.
There may be repairs or updates that need to be made before you can start
looking for tenants. Complete an inspection of the property and make a list of any painting, repairs, or replacements that may be necessary. Carpets cannot be stained or worn. Everything must be functional. That funny bathroom light that won’t turn on may have been fine while you or a family member was living there, but it won’t work when you’re renting the home out.
Finally, have a good professional cleaning done. The best tenants will not move into a home that has cobwebs in the corners, dust on the ceiling fans, crumbs in the kitchen, or insects on the windowsills.
What kind of insurance is currently covering the property? If you inherited the home or recently moved out of it yourself, it’s like a
homeowner insurance policy that covers the home. If you’re going to rent that property out, you’ll need a landlord policy.
The landlord policy is similar to the homeowner policy, but there are some changes in what’s covered and how much coverage is available for things like liability.
Additional liability in your landlord policy will protect you if a tenant or a tenant’s guest is injured. When you talk to your insurance agent, you should discuss other coverage. Loss of rent, for example, can be valuable in case your tenants need to move out during a catastrophe and you cannot collect rent from them. This is California, so flood insurance and earthquake insurance can be especially valuable. You need a comprehensive discussion over how to best cover your rental now that it’s a rental.
One of the things that accidental landlords struggle with is pricing their property.
When was the last time you had to pay rent? You might not know where rental values land, and once you start to look around, you might be surprised to know how much you can earn.
You can only earn top rents, of course, if you have an outstanding property to offer.
Also, establishing a rental value can be tricky if you don’t know the market. Support from a local South Orange County property manager can be especially important when you’re pricing your property. We collect data that can make this process a lot easier and more accurate. We know the market and the price points. We’ll tell you that the amount you can collect in rent will depend on a few important factors:
Understanding the market is especially important. Take some time to get to know what other homes are renting for around you. This data will help you price your property accurately and competitively. Don’t hold out for the highest possible rental amount. Vacancy is costly, and if your home isn’t occupied then it’s not earning any money.
If your property is cleaned out and ready for move-in, you have the right insurance and you’ve decided on a rental value that’s fair, competitive, and profitable, you’re ready to be a landlord.
Almost.
As you look for a tenant, maintain your property, and keep track of your
rental income, there will be details that are confusing and difficult to navigate. There may be questions you can’t answer or legal pitfalls that you never saw coming.
As a landlord, you’ll need to understand fair housing laws, security deposit laws, and how to enforce your lease agreement. These can be challenging issues for an accidental landlord.
The best way to protect your rental property and have a good rental experience is by working with a professional South Orange County
property management company. We can take the lead on leasing, managing, and maintaining your home, leaving you with peace of mind, regular income, and protection against expensive mistakes.
Let’s talk about what we can do for you, the accidental landlord who is trying to navigate a new role in a competitive and fast-moving rental market.
The laws are constantly changing, and a lot of accidental landlords will break laws and violate regulations without even realizing it. California has very strict tenant protections in place. You need to remain in compliance or face some pretty serious penalties. Here are the
most important laws you need to know, which we understand thoroughly.
| Rent Control Laws | Just Cause Evictions | Section 8 and Fair Housing |
| Many properties in Laguna Niguel and surrounding communities in South Orange County are restricted in when and how they raise the rent. As an accidental landlord, you are likely exempt from rent control laws, but you’ll still need to know what the limits are, because you may be competing for tenants in a market where many other properties do have to follow the rent control restrictions. | Evicting a tenant in California has never been easy, and the recent just-cause eviction requirements make it a little bit harder. You need a good reason to evict a tenant, such as nonpayment of rent, a lease violation, or proof that criminal activity is happening at your rental home. Even if you do have just cause to evict, the process is detailed and needs to be followed to the letter. We can help. | Fair housing laws in California are stricter than the federal fair housing laws. There are more protected classes. One area in which this is particularly relevant is Section 8 housing. You cannot discriminate against an applicant based on their source of income. Housing vouchers, in California, are considered income. Do not advertise a property with language such as “No Section 8.” You’ll invite a lawsuit. |
| Habitability Standards | Security Deposit Laws | Service and Support Animals |
| There’s an implied warranty of habitability in California when you rent out a home. Make sure you’re responding to maintenance needs right away and keep up with providing heat, hot water, and electricity to your tenants. We will make sure your property is not in danger of being deemed uninhabitable. | This is where it’s easy to make a mistake as a new landlord. There are strict limits to how much you can collect, although again, you will likely be exempt from those limits. You aren’t exempt from the timeline for returning a security deposit, however, and you have to know what you can deduct and why. This is why a property manager is essential. | When is a pet not a pet? When it’s a service animal or a companion animal. There are a lot of protections for tenants with disabilities, and even if you don’t want pets in your rental home, you have to allow service animals or support animals. We can help you understand how to navigate this complexity, and we’ll also make sure that all the documentation we can collect is on file. |
Many other laws will need your attention. These are simply the hot topic issues that we deal with every day as South Orange County, CA property managers.
Don’t put yourself at risk. Partner with a property manager before you even begin marketing your property for rent.
Let’s back up to our discussion about security deposits because as we mentioned above - this is where a lot of easy mistakes are made, especially by accidental landlords who do not have a great grasp of the law.
Before your tenant moves out, California law requires that you offer them a pre-move-out inspection. This is your opportunity to walk through your rental home with the tenant and point out areas that may invite a deduction from the security deposit. You’re allowed to deduct for tenant damage, but not for normal wear and tear.
These walk-throughs, while beneficial to both parties, can be pretty tense.
Which is why you want us to handle them for you.
As your
property management partner, we also know how to legally withhold money from the security deposit. This will be very helpful because it’s surprising to a lot of landlords how difficult it can be to distinguish between property damage and wear and tear.
To legally keep money from your tenant’s security deposit, you have to understand the reasons that a landlord might withhold money. In California, these are:
| Unpaid rent | Property damage | Cleaning fees |
|---|---|---|
| If your tenant leaves without paying the last month of rent or if they only made partial payments the last few months before moving out, you can apply the security deposit to the rent that is owed and overdue. You can do the same if utilities have not been paid. | This cannot be wear and tear. You’ll have to have enough documentation to prove that your tenants damaged your property and should be held accountable. | You can use the deposit to professionally clean the home before you re-rent it. But, you can only clean it to the same standard that the home was in when your tenants took possession. |
Usually, the confusion is with wear and tear versus damage. With a solid move-in condition report and a good move-out condition report, which we will provide, you can compare how the property looked before the lease and after the lease. That will highlight the damage.
You have 21 days from the tenant’s move-out to return the security deposit and/or a disposition letter.
You’ll need to send any remaining security deposit that is owed to them and if you made deductions, make sure there’s an itemized list of what you withheld and why. You’ll need to provide a full statement of your accounting that reflects what you paid to repair or replace damaged items. If you withheld the security deposit because of unpaid rent, make sure you include that accounting as well.
If you’re deducting for damage and you’re not able to make all the necessary repairs within those 21 days, you have to send a Good Faith Statement with an estimate of what those repairs will cost. This isn’t generally necessary, especially if you have a good team of vendors who can make quick repairs.
At Niguel Point Properties, we handle security deposits easily and without disputes or confusion. That’s incredibly helpful to accidental landlords who might not be sure whether that scratch on the floor is wear and tear or damage.
Another way in which we can help you is with vendors, contractors, and service professionals who provide maintenance. We are connected with reputable vendors who have fair and reasonable pricing. They also have the availability that’s required. If you have recently tried to hire a plumber or an electrician, you know that they’re busy and choosy about which jobs they’re willing to take on. We have a preferred list of excellent vendors who are committed to us and the properties we manage.
Our team will handle repairs quickly, whether they’re emergencies or routine. If there’s a turnover or improvements that need to be made, we ensure that we’re able to negotiate their best rates and their most favorable timelines. This type of relationship helps owners and landlords who have not previously had to respond quickly to the repair requests of tenants. It’s different when you’re maintaining a home for someone else. You have to be responsive and you need to be accessible.
There’s a lot more than goes into leasing, managing, and maintaining your rental property in South Orange County, CA. The lease agreement that you sign with your tenants must include legal disclosures to prevent lawsuits and disputes. We protect you from expensive legal mistakes and added liability.
There’s always a risk when you rent out a property. You don’t want to end up with a tenant who doesn’t pay rent or a plumber who isn’t licensed. You never know when something unexpected might happen, like a sudden leak that goes undetected and leads to mold. What if a tenant moves in a roommate or a pet without your approval? How will you handle late rent?
We are here to help you have a stress-free and profitable experience as a new landlord. When you find yourself with a property to rent out, contact us at Niguel Point Properties. We’ll help you be successful.
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Sat - Sun: open for rental inquiries + emergencies
Corp license: #01987260
Broker license: #01395953
