Real Estate

6 Property Management Rules From The Rental Bible

Here are some landlord rules that will make your landlord a more enjoyable and profitable experience.

RULE # 1. Acquire Your Tenant – The first step in making property management easier for you is choosing the right tenant. That means selecting a tenant who loves their place and doesn’t just like it because a loving tenant is a long-term stable tenant. You say “How do I know if someone loves my property?” Simply put, you can see it in their eyes. Usually, after showing the property, the love prospect will say “What do I have to do next?” And you will have a deposit on hold. If he walks out of your place saying “I still have a couple of places to see it,” that usually means the prospect is making a safe exit, making sure the door doesn’t slam his butt out. Make sure your deposit is in secured funds such as cash, money order, or cashier’s check if the move is quick. The check is fine as long as you have about 10 days before the move or you have reviewed the account in person, as a check can go bad several days later due to a bad check or a stop payment.

RULE # 2.-The Lease- A valuable piece of documentation is the lease. It sets the house rules, when the rent payments are due, the length of the rent, what happens if things go wrong or the tenant does not comply. This is valuable in case you have to go to court.

Rental agreements cannot be created by you, they must be created by a lawyer. The specifics of the lease must be consistent with state landlord and tenant laws. You can purchase a statutory agreement and add items to the appendix section if necessary.

RULE # 3. Rent Payments: Rent payments must be made by check or money order. Why do you ask? Create a trail in case you need it in court to show that the rent payments were made or not. If you make this your rule, then it is difficult for the tenant to dispute that the rent was paid when in fact it was not. The tenant also could not tell that his roommate stole the cash or something similar. I always give a receipt when picking up the rent. You can also make payments convenient for tenants by allowing them to make bank deposits. Just put out deposit forms several months in advance with your bank account number on each one.

Late payments must require a penalty after a grace period. The grace period is usually 3-5 days. After the grace period, charge a percentage of the rent or indicate a flat rate. Typically the charge is 5-10%. You have to make them feel a little responsible for paying the rent.

Partial payments can cost you. Once you accept a partial payment, you are giving the tenant permission to stay and possibly lose the balance for the month by law. Partial payments must be accompanied by a receipt indicating the remaining balance and when it is due.

RULE # 4. Security: Generally, a one month warranty is maintained to compensate the owner in the event of any destruction to the rental unit. According to Florida law, that money must be deposited in a bank account and the tenant must receive the bank that has it and also indicating if there is an interest account, who receives the interest and approving it with the tenant.

Security should not be used to rent. It is your only leverage tool to stay by your side. Once it is allowed to be used as a back rent payment, the tenant could do anything with your property and you have no compensation. The tenant can tell after using it that they changed their mind about the move. That leverage would disappear permanently.

RULE # 5. Maintenance: Remember that a happy tenant is a long-term tenant. That means when he calls, you respond very quickly. By doing so, you guard against the tenant’s excuses for not paying the rent. If there are excuses, they will surely come to light when the rent is collected.

Have your team of maintenance professionals close at hand. If you are on a low budget, hopefully you have handyman skills. If not, try to get a talented handyman. You will specifically need an electrician, plumber, general handyman, and landscaper on your list. Electrical and plumbing work is such a specific skill set that you need specialists. A handyman can perform a variety of tasks such as tiling, carpentry, and even roofing.

Schedule a time to get work done. Give 24 hours notice of work to be done. As long as you stick to the schedule, the tenant can’t complain that you don’t take the repairs seriously.

Maintenance does not mean room service for everything that “breaks”. Replacing bulbs should not be part of maintenance, except at move-in time. The tenant must learn this early on, otherwise they will have an incredible number of repair calls.

RULE # 6: Tenant Evictions – Unfortunately, it is sometimes necessary to remove a tenant from the property. Perhaps this happened as a result of non-payment of rent or misconduct that violates the lease.

For non-payment of rent, this requires a 3-day notice to vacate in Florida. Other lease violations require a 5 day notice. The notice should be delivered in person or posted on the door if it is not there and a copy left in the mailbox. I tend to take a snapshot that is posted on the door with a timestamp. After the 3-5 days, it is up to you, the landlord, to file a complaint with the court clerk and carry out the eviction. Remember that the 3 or 5 days do not include holidays or weekends.

Remember that eviction is the last resort, communication must be used first. Eviction means that communication has been broken and the relationship cannot be fixed. If the rent is delayed, ask why. Are there any work-related problems? Does the tenant have a plan to solve the problem? If it is a behavior-related problem, can the tenant curb his behavior?

Eviction can be a long process. It can take months in some states or as little as 2 weeks in Florida, allowing homeowners. You, as a landlord, may lose a month’s rent plus eviction costs, but if you are not contacted, then evict. Several tenants are gambling on your delay, and that delay typically costs the landlord a few months of rent.

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