Thinking of renting your property out without an agent? There are many steps that you will need to Navigate through. Below are 5 Tips to help you reduce the number of issues that may arise during the process.
Refrain From Renting To Friends And Family
A common mistake made by owners renting their own properties is renting to friends and family. A rental property is an investment and the goal is to maximize the return on the investment. Many times, friends and family expect discounts on the rent, late fees to be waived, and rental rates to remain the same year after year without any regard to fair market rent. Expenses (such as real estate taxes, insurance, HOA dues, etc.) tend to increase annually, without adjusting the rental rates to account for these increases you will end up decreasing your rate of return annually. I have also encountered countless owners who have severed relationships with their friends and family that were renting from them because things didn’t go as expected. Avoid this common mistake and don’t rent to friends and family.
Always Screen Prospects Prior to Entering into a Lease Agreement
Finding a great tenant is crucial for maximizing your rate of return. Incorporating tenant screening into the leasing process allows an owner to have a full picture of whom they are renting their home to and the likelihood that the tenant will pay their rent on-time, fulfill their lease term, and return the property in good condition. Owners who fail to include tenant screening in their leasing process face a higher probability of having to file an eviction, potential loss in rental income, increased repair expenses caused by the tenant and lots of headaches.
Always Charge A Security Deposit
It is extremely important to charge a security deposit when renting your property. A security deposit is collected prior to move-in and held for the term of lease and any extension of the lease, if applicable. Property Management Companies hold security deposits in an escrow account in accordance with applicable state laws and regulations (Florida Statute 83.43). The purpose of a security deposit is to assure that the tenant will fulfill their financial duties according to the lease and return the property back in the same condition they received it in (minus normal wear and tear). In the event the tenant doesn’t fulfill their financial obligations of the lease or they return the property with damage the landlord will follow the protocol as outlined here in order to claim the security deposit or portion thereof.
Perform a Pre-Inspection of The Property Before Moving a Tenant In
A smooth move-in will reduce the number of nuisances after a tenant moves-in. Therefore, it is essential to perform a detailed pre-inspection of the property and repair any issues that are found. Utilizing a checklist such as this one General Inspection Checklist will aid you if you are renting your property yourself. This service is included if you hire Coastal Pioneer Realty to place a tenant for you.
Avoid Accepting Personal Checks for Move-In Funds
A frequent request when a new tenant is moving into a property is to pay the move-in funds using a personal check. Problems can arise if you make this a common practice. We recommend that move-in funds always be paid using Cashier’s Check, Money Order, or immediate electronic transfer such as Zelle in order to avoid bounced checks. A bounced check, especially initial move-in funds could be costly to an owner. In short, some owners have had to evict a tenant that they moved-in without actually ever receiving funds from the tenant. Although this type of event is not typical and can happen and It’s better to be safe than sorry.
Note: This post is for informational purposes only. Coastal Pioneer Realty does not make any guarantees about the adequacy of the information in or linked to from this post, or that it complies with current applicable local laws including frequently changing Landlord-Tenant laws., This resource is not a substitute for the advice or service of an attorney; you should not rely on this post for any purpose without consulting with a licensed attorney.