The Trials of Managing Rental Properties

Trials of Managing Rental Property

Owning rental properties is a great way for building long term wealth by investing in real estate. This isn’t always as easy as it seems but with these tips and advice, you will have the knowledge needed for building wealth through real estate ventures. There is always the potential for the stock market to crash or multi-million dollar businesses to fail but the one thing that is always certain in life is that people need homes to live in and this is where you can make money in the real estate market.

Take the Lemons and Make Lemonade

Let’s face it; times are tough for nearly everybody but if you have good credit and a real drive for building long term wealth, you can make a ton of money by investing in real estate. It is essential that every property that you are considering purchasing be gone over with a fine toothed comb. You should have a notebook to list the good points as well as the bad points about every single property that you visit. This will help keep you from making an unwise decision regarding properties in Florida.

It’s wise to contact a licensed home inspector before putting a contract in on a property. The inspector will be able to let you know what repairs are necessary to make the property rentable. He will also be able to inform you of any permits you will need as well as the codes that need to be met for your rental property.

Make Your Properties Outshine the Rest

Unfortunately, most landlords don’t think about polishing their rental properties so that they attract the best possible tenants. In all honesty, a home that looks unkempt will not attract the tenants that you would like renting your property. You need to ensure that the rental property is in exceptional condition and that you or a professional company that is capable of managing rental properties keeps the home in good repair.

Marketing Rental Properties

Many people think that managing rental properties in Florida is difficult enough but the hardest thing with rentals is marketing them in them right way. Everybody has heard stories about tenants from hell who trash the property and don’t pay their bills. You must take every precaution to ensure that you don’t end up with problem tenants.

Many potential landlords try to save a few dollars by placing flyers all over town. Although this practice sounds cost effective, it rarely draws top notch renters. The best advice for landlords is to stick with both print and online newspaper advertising. If the shoe was on the other foot and you needed to rent a home, you would probably start with the newspaper classifieds. It’s the safest way to find the best tenants.

Double Check Everything

It is good business sense to do background, credit and employment checks on all potential renters. They may appear to be the picture perfect, upstanding citizens that you were looking for but turn out to be monsters. You simply must protect yourself and your investment by checking everyone out thoroughly.

Show Me the Money

Every landlord purchases rental properties so that they can make money. A major point that needs to be clear when managing rental properties is that you must have the money upfront. Customarily, landlords obtain both first and last month’s rent as well as a security deposit prior to the move in. This is a solid practice that shouldn’t be deviated from and it shows that your tenants truly have the ability to pay rent. Be sure to put the security deposit in an interest bearing account as this is Florida law.

A Picture’s Worth a Thousand Words

Once you’ve selected a tenant and move in day rolls around, it is of the utmost importance that you take still photos of every inch of the property. You should also include a newspaper showing the date so that there is proof of when the pictures were taken. Savvy people managing rental properties also shoot a complete video of the property. This may sound like overkill but it is the safest way to prove the condition of the rental home immediately prior to the tenants taking possession of it.

Respect Your Tenants Privacy

Just because you own the property doesn’t mean that you can still enter it whenever you want. You must always give a tenant sufficient notice prior to entering the premises. One way to consistently monitor the condition of the property is to hire an extermination company for an annual contract. This way the exterminator will legally be in the home on a monthly basis and can report the condition to you. This helps to avoid any landlord tenant problems and gives you the assurance that your investment is being properly kept.

The Dreaded Late Rent Payment

Naturally, the reason people get into managing rental properties is to earn a living or be able to begin saving for retirement. Unfortunately, those efforts can be thwarted when rental payments are late or non-existent. However, you still must have a human side and consider the problem before taking further action. If the tenant just bought a new can and just started getting behind in their rent, you have every right to be upset. If the tenant perhaps was hurt in an accident and is waiting for a disability check or there was a death in the family, you should be compassionate and work with them, if possible. Of course, you need to get your rent payments but sometimes it is necessary to be a bit flexible when your tenants have tragedies occur in their lives.

The Last Straw

There might come a time when you have no choice but to evict your tenants. This is always a possibility when managing rental properties. It is very important that you go through the proper steps to evict your tenant legally. Simply telling them to get out would be considered an illegal eviction and you could end up paying them instead of getting the money that they owe to you. You don’t need a lawyer to handle an eviction but you do need to contact your county clerk of court to assist you with the legal process.

The Final Walkthrough

When a tenant leaves, you should always try to do a final walkthrough with them. This way you can address any problems with the property immediately. If there are issues with the home, you should have a camera and newspaper ready to document it. A video of the walkthrough is always a good thing to have as well.

When a tenant leaves without doing a walkthrough, it is wise to bring at least one person with you to check the property. This will help to authenticate the pictures and video that you need to take of the premises. Upon inspection, if there are damages or even garbage or property left behind or the home is dirty, document it. You will need to get estimates done for any necessary repairs or cleaning. Having two or more estimates for each of the damages will be better for your case against the former tenants.

Should you need to keep any or all of the money for damages, you must send your former tenants a letter documenting the reasons and proving the costs. This must be sent within thirty days and needs to be sent by certified mail. If you fail to provide the former tenant with such a letter or refund their security deposit within thirty days, they have the right under Florida law to sue you for treble damages. This means that you will owe them three times the amount of the security deposit and you will forfeit any damages incurred at the property.

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