Susan Ormont - RISK VERSUS REWARD: A SIMPLE GUIDE FOR INVESTING IN REAL ESTATE

12. Rules for the Property

You’ll need general and specific rules for your property. If you establish rules in writing upfront, and then explain them to the tenant verbally, they will have less of a leg to stand on if they break a rule or challenge you in court over a dispute. Here are some issues to consider, but I urge you to brainstorm other possibilities as well: • cleanliness/maintenance of the home • number of vehicles and where they can be kept • smoking marijuana (is it legal in your state? If so, is that something you want to deal with?) • installing satellite dishes • changing the locks • taking down and installing window coverings • loud late-night parties • fireworks, firearms, and other hazardous materials

13. Renter’s Insurance

I suggest the lease require the tenants to have renter’s insurance. That way, they can’t legally sue you if, say, the house burns down, along with all their contents, and they cry that you didn’t “protect their possessions.” Please consult your attorney to ensure you’re legally allowed to require that they have renter’s insurance . 14. Utilities Your lease needs to contain a clause about utilities; specifically, what utilities are required to be paid, by whom, and when? Spell out every single utility that the tenant is required to pay. 106

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