Renting out a condominium: what you have to consider.
Who is buying a condominium as an investor to rent it out, must pay attention to many different things. With the status as a landlord you will have rights and obligations towards the tenant of the apartment and the condominium owners' association. Firstly, it should be said that it is generally allowed to rent out a condominium. However though the condominium owners' association can clarify that renting the apartments as a holiday apartment or as an office is permitted.
Rules of the house and tenancy agreement
When choosing a tenant you should carefully pay attention and also decide wisely who will fit into the house. When you rent out your condominium, you will have to enforce claims and complaints from other owners against your tenant, for example if he listens to loud music or if he loads of the bulky trash in the yard. To ensure that your tenant follows the house rules, you should enclose him the rules of the house in the tenancy agreement. It is also useful when the house rules are explicitly stated in the tenancy agreement. Also you should clarify the amount and the allocation formula for the operating and heating costs in the tenancy agreement and explicate whether you or the tenant take over minor repairs.
Obligations and rights
In one of your obligations is included, that the apartment should be maintained. For example you have to make sure, that a broken heater or leaky window are repaired quickly. It is also important to create the operational cost account for the tenant each year. For all those tasks that occur when you rent out your condominium, you can hire a property management. Through this specialized service your time will be dramatically reduced.
Renting out a condominium: the deposit and termination.
One of your rights is that you are able to demand up to three net rents as a deposit from the tenant. It is used for protection purposes, if the tenant causes for example damage in the apartment. The deposit must be stored – separated from the rest of your wealth – in a bank account and it has to get interests regarding to the standard rate. As a landlord you may also have the right to terminate your tenant without notice if he has not paid rent for two months.
Renting out a condominium: declaration to the tax office.
In your annual tax declaration the rental income will be shown in appendix V. The gross monthly rent is given and also all expenses are deducted, arising from the rental. These include the cost of property management and the interests that accumulated because of the loan, which was taken to purchase the apartment. Also the depreciation of the apartment belongs to these advertising costs.