Owning a rental property brings its own share of challenges and benefits. You get access to tax benefits, a reliable passive source of income, and you still retain access to the property. The downsides are that tenants may become difficult, and you have to maintain the property for them.
You can rent out an investment property when you feel like it, though. There are certain requirements and procedures you need to participate in to legally rent it out.
Here’s everything you need to know about legally owning a rental property.
Requirements to Rent Out an Investment Property
In Arizona, all owners of taxable property must obtain and use a tax license. This is necessary even if a property management company is handling it on the owner’s behalf. The same applies if someone else files tax returns on their behalf.
Rental Property Licensing Process
If you need to obtain a TPT license, your PM can handle the property licensing. The Residential Rentals ONLY Application is submitted for the city the property is located. The owner doesn’t need a new license for different cities as long as the same company handles them.
Your application is submitted electronically on AZTaxes.gov. The PMC should receive the license number within 7 to 10 business days.
Furthermore, your PMC must file taxes using the owner’s license number online.
Any changes to the registered properties must be done online at AZTaxes.gov. It should reflect the changes on your user profile.
Property Management Company vs Realtor
Once you have your license, how do you plan to obtain renters and manage their needs? And is one of these required to rent out a property legally?
You should understand that an Arizona realtor does not fulfill the same role as a PMC. A real estate agent helps to sell or rent out properties, but they do not manage them. If you’re investing in Arizona real estate without a PMC, then you’ll need to acquire the residential rental property license on your own.
While you don’t need a PMC to acquire a property, they’re essential if you need help managing multiple ones.
Look for a company that offers multiple services such as marketing, rent collection, and legal guidance. Make sure that they know the area and have experience handling tenant complaints and questions.
Get Help With Arizona Real Estate
Anyone who wants to rent out an investment property would benefit from utilizing the help of a property management company. They can handle the paperwork so that everything is above board and legal. Meanwhile, you can focus on your day job or invest in other properties.
Caldwell Property Management offers its services throughout all of Maricopa County, AZ. We take care of evictions, financial reporting, property inspections, and more. Contact us if you have any questions about how we can help you.