Rental property can be a great investment option. Property ownership however comes with a substantial amount of maintenance, responsibility, and risk. A landlord must stay current with property taxes and maintenance whether that property is generating any income from renters or not. In Prince George’s County, Maryland, there are also very specific laws regarding rental property, and the landlord is responsible for staying in accordance with those laws.
All-in-all, a landlord has to constantly weigh the pros and cons of rental property ownership and decide whether to continue in that capacity or to sell the property. Lacey, in Hyattsville, Maryland found herself at that crossroads and began to research her options more thoroughly.
Lacey’s Rental Properties
Lacey started her real estate investment with one small home in Hyattsville, Maryland. The home, a 2 bedroom, 2 bath home with just over 1500 square feet of living space is currently renting for $1400 per month. She has had the same tenants in that home for three years, a husband and wife with a 4-year-old child. They pay their rent on time, are respectful of their neighbors and of the property. Based on her experience with these tenants, Lacey felt comfortable purchasing another home in Hyattsville to use as a second rental property.
Once Lacey was convinced that she could handle the responsibility, she purchased a second property on the other side of Hyattsville. This home is also a 2 bedroom 2 bath home but with less living space – just under 1,000 square feet. However, because of its location, it actually rents for more than the first home, bringing in $1600 each month. Lacey has had two different tenants in the two years since she initially renovated the home and listed it as a rental. The first tenant, or tenants actually, were two cousins ages 21 and 23. After two different expensive repairs because of reckless behavior, Lacey chose not to renew their rental agreement. Once she had completed the repairs, another tenant quickly moved in. The current tenant uses the second bedroom as a home office for her website design company and has been a responsible and respectful tenant.
With the income generated by those two rental properties over the past few years, Lacey purchased a third property last year, also in Hyattsville. The third property is an 1800 square foot, 3 bedroom, 2 bath home renting for $2500 per month. The current tenants are a family of 4 who loves the small fenced-in yard which provides a safe play area for the two children.
So each month for the last three years, Lacey has consistently made $5,500 combined from her three rental properties. Which sounded like a pretty good return on investment. She had a maintenance schedule mapped out, so she stayed on top of that. She had a specific contract drawn up for each property so all the bases were covered there too. But that third property brought with it another aspect of landlording that Lacey was not excited about – 24-hour contact availability.
Prince George’s County Rental Property Law
In addition to specifying the responsibilities of both the landlord and the tenant, disallowed activities, details about security deposits, and other items normally seen on standard rental or lease agreements, landlords in Prince George’s County, Maryland are required by law to hold a license issued by the Director of the Pince George’s County Department of Environmental Resources.
After the property passes an inspection, the Director issues a license valid for either one or two years. If the property does not pass the inspection, the property owner is provided with a written list of defects to be corrected. Once a license is issued, it must be displayed at the property or a copy made available to the tenant and inspectors upon request.
The part of the law that Lacey had not anticipated is that any landlord with three or more rental properties is required to be available 24 hours a day either by providing a 24-hour telephone number or answering service. Tenants are only supposed to use this number for emergencies, but Lacey knew that once that number was provided, different tenants could use it for whatever they decided were emergencies. After a year of being on-call 24 hours a day, Lacey decided she wanted to go back to less than three rental properties.
After careful consideration, Lacey decided that she did not want to sell all three of her rental properties, but did want to scale back to just the one larger rental home. Once she made her decision, she wanted to complete the process quickly. While researching her options, she came across our Akin Developers website.
At Akin Developers, we buy homes for cash, in almost any condition, and can close on the sale quickly, which ultimately is what sealed the deal for Lacey. During our inspection of the homes it was obvious that although they were older properties, Lacey had kept them in good repair. We were able to offer a fair cash price for the two rental properties, which Lacey accepted. Lacey was relieved to eliminate some of the stress that had increased with the additional 24-contact availability requirement while still retaining some rental income.
Contact Akin Developers today to see how we can help you too.