How to rent out your house, in Orlando (or really just about anywhere). This article is for those who are thinking of renting their own house out to prospective tenants. Not for those looking to rent a house for themselves. However I can help you with that as well.
First here are a list of some of the reasons homeowners decide to rent.
Why should you hire a professional to handle your residential rental. There are actually many reasons, here are a few.
Fearing the renter.
You possibly have heard horror stories about renters. After all stories about good renters are not going to make it onto sixty minutes. Well here is both the good news, bad news and the average news.
Yes there are professional renters. In fact there many renters have been renters long enough to be experienced at it. Many renters hate the fact that they are "making the landlord rich" or paying for someone else's house. These type renters rarely leave without leaving problems in their wake. Sometimes a path of destruction. Even in higher end homes.
The average renter is a decent person. They may be renting for any number of honorable reasons. You get a clean bill of health on their credit score and rental history. Still it is not their home. The maintenance and upkeep have to be watched over closely. When they move out the home is rarely ever in the same shape. Not that they were bad renters. It just is not their house. So you have to address those issues. They have to pay to correct them. Which means you must have documented the condition of the home, made them aware of their responsibilities,collected and properly handled their deposit. Then you have to handle informing them of the issues,having a repairman available, making repairs, track all your expenditures collect from their deposit or possibly worse. Your work must be performed properly or a judge will side with the tenant.
Another thing that I have seen. Even though we were right on every step the tenant had a attorney threaten to sue us. Knowing that we would have to pay to defend ourselves and hoping we would simply return the deposit and cover the damages. The attorney was possibly a friend or relative and working for free. Or maybe he wrote the letter for a small fee. Sometimes you can have an attorney threaten to sue for as little as $200. I have done that once 20 years ago. There are lots of attorneys in Florida. Well actually there are many attorneys everywhere.
How to prepare your home for renting.
The number one priority is the renters health and safety. Then keeping repairs to a minimum And finally making the home appealing to a renter in the specific rental price range the home falls into. Let's look at each one of those in further detail.
Finding and selecting tenants.
We know how to do this. We manage nearly 100 rental properties. Normally renters will call us looking for rentals which puts you in a much better negotiating place than seeking them out. You have what they want as opposed to a sign in the yard or newspaper ad.
Scheduling opportunities for the renter to see the home. As a private renter if you go that route you will hate this. renters will show up late or cancel. There are remedies or rather time management techniques to minimize the impact of missed appointments. Scheduling them to see several in one day works well. Having them meet you at your office works well. If they do not show, hey you're still at work ! Many times owner-landlords make the mistake of having their home address being known by the renter. Oddly enough knowing an office address of the landlord/Realtor always seems to be good enough. I have ran into clients at the grocers etc but never at my home.
Qualifying the renter and making the selection. If you waiver on this you will eventually pay for it. The more they do not want you to look at their credit and complete rental history the more you need to. The more they baulk at paying for the credit check etc the more likely they will be late on the rent.
Oh by the way, you need to make sure you follow the fair housing law and any specific state or county occupancy laws. In most places you are allowed a set number of residents per bedroom. There are laws that govern what a bedroom is also. So a large closet can not be counted for a bedroom. Do not believe for a second the neighbors will not complain if there are too many residents in a home.
One of the time saving techniques I use is early information. These restrictions and qualifications should be covered over the phone before meeting the potential renters. With professional Realtors the better renters do not expect to get around the qualification process.
The application process-everyone requesting an application gets one electronically. Everyone requesting an application gets one. I repeated that on purpose. To deny someone an application is asking to get sued. Sending it electronically shows you gave it to them. However process no part of an application till the fee is paid. Fees in your area may be governed by state or local laws so make sure you comply. Everyone over 18 or that will be turning 18 during the rental period should fill out an application. At this point the more professional the property manager is, the more the property manager does not waiver the more the tenant will expect the same when they leave.
Disqualify non qualifiers early- not enough income, to many residents to many autos if there
is no street parking, type of vehicles if the HOA restricts them. Deny these applicants and do not charge for credit checks or background checks. It avoids trouble. Right now someone is saying then why would they apply? Because they know things get overlooked. A better question would be, are they being honest and how are you going to deal with something like this. You discover a house full of people with a tow truck parked in a driveway when the HOA is looking to sue you for telling them it was OK. Or when the tenant buys one later because you did not document the fact you informed them of the restriction. Sounds like fun right? LOL let's just call it interesting.
Just to give one more example of why you need a property manager. If your renter ends up being a felon how do you deal with that? If their neighbor calls, the HOA calls etc do you tell them? Do you conceal it? Did you check to see? What it was a sensitive felony and the home is too close to a bus stop or school? Get a professional property manager that carries the right types of just in case insurance.
Holding a property and the tenant moving in.
Renter availability does affect the decision to do this. You need a deposit to hold a property for a renter. If you have competition for a home then you should take a deposit before the application is reviewed. You need to have the understanding that if accepted the property will be theirs but the deposit is non refundable. If you are handling a higher end rental with fewer renters you have to make that decision on a case by case basis. It is better to have the owners documented input. Local or even federal laws may dictate you handle each applicant the same in most areas but this one is still flexible as of today.
Move in inspection-deposit has cleared, first and last months rent have been deposited and cleared. Now it is time for the move in inspection. The property manager should have already conducted one earlier the same day. Complete with time stamped video and photos showing the actual full condition of the home. When the tenant arrives give them all of the time they need to feel comfortable and point out discrepancies. They will miss most of them anyways. Be honest and it will reward you with return business and trust.
I prefer a allotment from their employer. You may get that from a someone in military service but probably not anyone else anymore. So the next best option is a bank draft. The Third best option is setting them up with direct deposit. I want a record of the information I give them so there can be no blame placed on me. I do not want a check or cash if at all possible.
In the past I have used escalating late fees with success. I did this on a renewed lease after the renter was habitually late. He always had just paid the late fee. It was like getting extra rent but it so irritated me. So the escalating fee solved the problem.
I obviously want to talk to you about managing any property in the Orlando area. We will do a great job for you if we decide work together. Feel free to contact us here. Or simply give us a call.