I just got off the phone with one of my clients who decided to list his house for lease also. The sale of his Scottsdale patio home has been complicated by some major community renovations, which for the long-term, add tremendous value, but for the short-term do nothing in terms of curb appeal. Winter visitors have gone home. There are a shortage of unfurnished rentals in the area, so his decision to open up his options is a smart one.
There’s an education process needed for first-time landlords.
The first resource I recommend is the Arizona Landlord Tenant Act. After reading this documents, sellers often will say “Never mind”.
The next step for an owner who decides to move ahead is to contact their financial planner and their accountant to see if being a landlord works for their particular situation. Talking to their insurance agent is next.
The house must also be registered with Maricopa County, as a monthly sales tax (TPT) must be paid to the city the rental property is located in.
Under A.R.S. § 33-1902, an owner of a residential rental property in Maricopa County must register certain information relating to the property and its ownership with the Maricopa County Assessor. ALL owners of residential rental properties must register their properties regardless of whether the tenant is a family member. Under the statute, out-of-state owners must designate a statutory agent who lives in Arizona who will accept legal service on behalf of the owner.
To register a rental property, you can use this on-line form: Maricopa County Residential Rental Property Registration
Each city has different rules and rates which must be followed. The Scottsdale rental tax rate is currently 1.65%. If the homeowner will be paying the sales directly, they need to register the property with the City of Scottsdale. If they are working with a property management firm, they might be covered under the company’s master license.
Being a landlord isn’t for the faint-hearted, but with some education and experience, it can definitely be a cash-flow, asset-building option.
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