Chris Hounchell REALTOR

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Award-winning Florida real estate Broker PROUDLY SELLING IN PINELLAS, HILLSBOROUGH, PASCO, MANATEE & SARASOTA COUNTIES since 2004.

How to Ensure a Smooth Rental Turn Over

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There will come a time for every landlord to turn over their rental property from one tenant to the next. You would think it would be as easy as collecting the keys from the former and giving them to the latter but that’s not the case. Proper planning and proactive actions can go a long way in making a rental turn over a smooth and efficient process.

Should I Stay or Should I Go?

Before ever considering further steps in a turn over plan, you, as the landlord, need to know if your current tenants are staying or going. Your lease will spell out the specific requirements for providing the opportunity for a renewal or for giving notice of non-renewal. If you’ve decided to not renew with your current tenants or they have decided to move on, put the specific move out date in writing. If you are not renewing your lease, send the notice via certified mail with a return receipt. If your tenants have given you notice, have them send it to you in writing with a signature.

Communicate

Provide your tenants with a copy of the move-in inspection report and a detailed description of the steps that need to be taken to help ensure they receive their security deposit back. Offer your tenants the opportunity for a pre-move out walk through so you can address specific concerns or needs for repair prior to their move-out. This lays out how you expect the property to be returned to you and gives the tenants the chance to meet those expectations.

How to Ensure a Smooth Rental Turn Over

The Move-Out

On the agreed upon day of move-out be prepared to meet your tenants at the property and complete a final inspection with them. Note any damages and normal wear and tear and have your tenant sign the list, just like they did for the move-in report. Make sure the tenant turns in all keys to the property, even those copies they made at their own expense, garage door openers, mailbox keys, and parking passes. Lastly, get their new mailing address so you can send back the security deposit or forward any future written communications to them.

Prepare For the New Tenant

Don’t waste any time getting the property ready for the next tenant. This can be the most costly point of turn over since a vacant house is a loss of income. The house should be cleaned from top to bottom and all repairs should be completed prior to a new tenant taking possession. If the former tenant left items behind, the landlord is responsible to remove them from the property and store them for a time and in a condition prescribed by local law. If you do change the locks, have extra copies of the keys made not only for the tenant but for yourself and your property manager.

Move-In Day

On the day your new tenants arrive, walk through the property together, make note of the current condition of the house, and both you and the tenant should sign the report. Be sure to deliver a copy to them as soon as possible. Explain how to operate the basic house systems and appliances, provide your contact information, and remind the tenant of any specific responsibilities related to the house, such as lawn maintenance, parking regulations, or pet rules.

Once you develop a turn over plan and stick with it you’ll find the process reduces the stress and time involved in seeing one tenant out the door and welcoming a new one in.

The Cost of Eviction

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One of the most feared situations when it comes to managing a rental property is an eviction. In a perfect world, tenants would pay their rent on time every month, adhere to the terms of the lease, and leave your property in better shape than they received it. Reality is far different. While most tenants work hard to remain in good standing with their landlord, there are those in the minority that don’t. The cost of eviction is not inexpensive for a landlord.

Are You Able to Evict?

Before ever filing a complaint in Court, you’ll need to determine if you have the legal right to file an eviction. Unpaid rent is not the only reason to evict, although it is the most common cause. If you’re looking to evict a tenant because they have unauthorized animals in the property or additional tenants that exceed the lease or public code allowances you need to see what remediation your lease and local & state laws require before proceeding with an eviction. Often you’ll need to provide written demand for payment of rent or resolution to the dispute to the tenant with a reasonable timeline.

The Cost of Eviction

What Does an Eviction Cost?

There’s no one-size-fits-all price tag for an eviction. Sometimes a landlord will get “lucky” and a tenant will abandon the property and not contest the eviction proceedings other times a tenant will fight to the bitter end. The cost also varies based on how much back rent the landlord is owed, attorney’s costs, and Court filing fees. There’s also the question of what state the property is in once the eviction has been completed. If the property requires major repairs in order to to make it habitable for the next tenants; those costs coupled with the time lost on rent can also add up quickly.

A brief summary of eviction costs include:

  • $500 – attorney fees
  • $50-200 – Court fees
  • $150 – rekeying costs
  • $1,500 – repairs and cleaning fees
  • $4,500 -3 months of lost rent after eviction was completed

Total: $6,850

Can You Recoup Your Loss?

With the appropriate evidence (e.g. a lease, late notices, demand letters) a landlord can file a complaint in small claims Court for a personal judgment against the former tenant. If the landlord secures a judgment they can attempt to collect the unpaid rent and charges for damages (if any) but roughly only 17% of landlords who seek out this option ever see repayment.

There’s no solid guarantee that the tenant you thoroughly screen isn’t going to default on their rental obligation. But adhering to the lease (late fees and proper notice) and keeping communication open with your tenant can alert to you problems before they escalate and can protect you and your investment in the long term.

Source: https://www.landlordology.com/cost-to-evict-a-tenant/

How to Screen Potential Tenants

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The process of obtaining a tenant for your rental property seems straight forward. You need to market the property, check out the potential tenant, and then sign the lease. But what exactly should you do when you’re checking out your tenant? Is a credit check enough? Let’s walk through how to screen potential tenants.

Check Everyone

Your tenant application should be filled out by every adult 18 years of age and older. This works to your advantage for several reasons including obtaining every adult’s contact information and making each adult liable and responsible for the lease obligations. Children and those adults with incapacities are exempt for background checks, however. Don’t request a simple credit score but rather a full credit report with details for both positive and negative factors. This will help you understand any patterns of late payments and delinquencies.

How to Screen Potential Tenants

Credit Reports Alone Aren’t Good Enough

It seems like a reasonable assumption that if a potential tenant has failed to make payments on their financial obligations they’ll have a less than desirable credit score. That may be true but what if a previous landlord didn’t report to the credit bureaus or the tenant has worked to clean up their credit score? As part of your research, you should search the local (in relation to their previous addresses) court records for eviction proceedings. You’ll also want to run a criminal search for each applicant.

Make the Calls

Asking for references does you no good if you do nothing with the information. You should verify current employment status as well as the likelihood for continued employment. Contact other landlord references to confirm that timeliness of payments and if the tenant’s behavior was in line with the lease.

A thorough tenant screening puts you in the best position possible to decide whether to approve or decline your applicants. You don’t need to do all the leg work yourself though. There are services you can order the necessary credit, criminal, and eviction reports and have them delivered right to your inbox. All you’ll need to do is make the phone calls to confirm employment and prior rental history. If a potential tenant is hesitant or refuses to submit to the screening process you’ve put in place should be an automatic disqualification for consideration.

How to Be a Stress Free Landlord

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You may think the hardest part of owning a rental property and acting as a landlord is finding quality tenants but you’d be wrong. The real work begins once your tenants sign the lease and move into your property. It can be stressful owning a property that relies on a third party to pay the bills. We have four ways to habits to help you be a stress free landlord.

Be Consistent

Routine and consistency are your two best tools when it comes to being a successful landlord. When you draft your lease, explicitly state the rules for the tenants including rent due date, late fees, pet policies, and things like smoking and lawn maintenance. Make sure you collect the rent at the same time and in the same manner every month and enforce the terms of the lease. That means not giving your tenant a pass on late fees or bending the rules despite the saddest sob story they can tell you.

Seek Out Professionals

Drafting a lease agreement shouldn’t be the only time you seek out professional help when it comes to your rental property. Unless you’re a master carpenter, plumber, and electrician chances are you’ll need the assistance of one at some point during your tenants stay. Hiring a professional can save you time and money by knowing how to remedy the issue in the most efficient and effective way possible.

How to Be a Stress Free Landlord

Put It In Writing

Whether it’s a no smoking policy, a change of address, or late rent notice…put everything in writing. If you have any verbal conversations with your tenant back it up with a summary email. It’s also a good idea to keep a record of when you received each month’s payment and in the form it was made (check, money order, electronic payment, etc.).

Respect Your Tenants

Your rental property is a business and your tenants are your customers. You should want to keep them as happy as possible without putting yourself in an uncomfortable financial position or setting expectations too high that they can’t always be met in the same way. Keep your communications limited to specifics and within normal business hours, if possible. Finally, adhere to your obligations under the lease. Make repairs and respond to questions from your tenant in a timely fashion.

Owning and managing a rental property doesn’t need to be a stressful situation, even if you got into the business because you had no other option.

Allowing Pets in a Rental Property: Yes or No?

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A common concern for landlords is the question of allowing pets in a rental property. Having a no-pet policy can hurt your tenant search by excluding a large number of qualified renters simply because they have a pet they are not willing to part with in for the sake of an apartment or house. But having a pet can open your property up to damage and possible liability if there is an incident. With two conflicting situations, it’s difficult to determine what a landlord’s best course of action is.

Things to Consider

The obvious things to consider when it comes to allowing pets in a rental property are damage to the property and liability issues. Animals are susceptible to anxiety and misbehavior due to changes, such as moving to a new home. Even the best animals could chew on cabinets and wall corners, dig into or soil carpets, and/or scratch walls and windowsills. In addition to what could happen to the property itself, you need to consider the behavior of the animal when it interacts with the neighbors and any visitors to the property, including yourself. Other things to consider at the local laws that may ban specific breeds or species.

Should You Allow Pets In a Rental Property?

Developing a Pet Policy

As a landlord, you can pretty much set any policy you’d like when it comes to pets but be mindful of what is and isn’t practical; expecting a dog to never bark is outrageous but a “yappy” dog can be considered a nuisance. You may want to hold a pet “interview” before agreeing to allowing a tenant to keep a pet in your property. This would allow you to keep a wider pool of potential tenants open but be able to weed out those tenants with pets who don’t meet your guidelines such as breed, size, or temperament. Once you do allow a tenant to house a pet you should have a written agreement with the rules clearly stated. These rules should list the specifics of each pet, the maximum number of pets allowed, and how the tenant is to expected to care and maintain the property and neighborhood with relation to their pet. You may also want to consider adding rules to the pet policy regarding the tenant’s responsibilities for caring for their pet such as not leaving the pet outside in extreme weather conditions or at night.

Protecting Your Property

If you do allow pets in your rental property, you should protect yourself both against the possibility of property damages and also liability against personal injuries arising from pets. A call to your homeowner’s insurance company will help determine what is and isn’t covered in your policy and if it’s necessary to purchase a pet rider. To help off-set the costs of needing to clean carpets and other areas of the home after the tenant and his pet have moved-out, you should collect a pet fee (per animal)  at the signing of the lease. You should make your tenant fully aware that this fee is non-refundable and additional costs related to pet clean up may be deducted from their security deposit if necessary. You should also reserve the right to have the tenant remove the animal from the property at any time it becomes a nuisance to the property or the neighborhood without breaking the terms of the tenant’s lease.

Ultimately, deciding whether or not to allow a pet in your rental property is an individual business decision.

Do you allow pets in your rental property? Why or why not?

Before Renewing Your Tenant’s Lease Consider These Three Things

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If you own a rental property, there will eventually come a time when you need to decide if you want to offer your tenant the opportunity to renew their lease and what the terms of that lease will be. You may be thinking that’s it’s a given to offer an existing tenant the opportunity to renew the lease at or close to the original terms. However, before renewing your tenant’s lease consider these three things.

Three Things to Consider Before Renewing Your Tenant's Lease

  1. Your Tenant. Consider your tenant’s history of paying rent on time, the way they have treated your property, and your overall relationship with them. Have they paid the rent on time every month or has it always come just under the wire of the grace period? Worse, has it been late on more than one occasion? More than likely you have seen at least the outside of your property during your tenant’s stay. Has the outside of the property been well kept? Have your neighbors made legitimate complaints about noise or other disruptions? Has there been any police involvement during your tenant’s stay? Lastly, consider your relationship with the tenant. Have you and the tenant had a respectful relationship? Has the tenant demanded that you fix non-urgent issues immediately? Have they observed the terms of the lease and not ignored things like no-pet or no-smoking clauses?
  2. Your Long-Term Goals. You should have evaluated your long-term goals before entering into a lease with a tenant but before renewing your tenant’s lease is a good time to refresh those goals. If you intend to sell the property, renewing with a tenant may not be in your best interests. Attempting to show a property to potential buyers with tenants still in place can make a buyer shy away from presenting an offer; even if your tenants intend to leave before closing. If you are looking for a long term tenant and your current tenant has expressed interest in only a month-to-month arrangement you should be hesitant to jump at the chance to keep your income stream positive. Having a month-to-month tenant can leave you looking to rent the property during an off-time of year or make you lose a long term tenant because your move-in availability doesn’t align with their needs.
  3. The Market. As we all know, markets ebb and flow and the rental market is no different. What may have been a competitive rental price last year may be below market this year. Research current rental rates for properties similar to yours. Be sure to take into consideration the amenities your property offers and any cost increases you can foresee for the coming year. Also, weigh the possibility of turnover v. the cost of not raising the rent.

As you can see, it’s not always easy to decide to renew your tenant’s lease. We always recommend you do your research and adhere to the terms of renewal as listed in your current lease agreement and local & state rental laws.

How Long Should You Stay In Your First Home?

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If you’re considering buying your first home, you’ve probably been advised to weigh the benefits of buying v. renting and evaluate your financial health before you start looking. There’s something else you should consider as a first time home buyer and that’s how long you should stay in your first home.

The Five Year Rule

The traditional advice for first time home buyers is to be prepared to stay in your first home for at least five years. The thought behind this advice is that it will take at least that long for your home to appreciate enough to recoup the money you put out for closing costs, both buying and then selling the home. The length of time for this rule may be extended depending on how much money you paid for a down payment and how much you’re paying towards your mortgage principal. The longer you stick with a mortgage, the more money your monthly payment will be applied to the actual principal instead of interest, which decreases your debt and increases the amount of profit you could gain.

Market Trends

If there’s something to be learned from the housing crisis that began in late 2008, it’s that the signs are there and market players need to pay attention to them. This is where having an experienced Realtor on your team benefits you. A Realtor can analyze the current market and help determine if there is room for appreciation or if the market has reached its peak. Obviously buying in a market that has a good chance of appreciation over the next few years makes for a better opportunity for a first time home buyer to see a return on their investment if they choose to sell in the future. It also may allow the first time buyer to move on from their first home faster if the value appreciates quickly.

How Long Should You Stay In Your First Home | HounchellRealEstate.com

First Time or Forever

Over the last two decades the thinking has been that first time home buyers purchase a “starter” home and graduate to a larger home as their salary increases, their families grow, and the value of their starter home appreciates. In our parents’ and grandparents’ generations, their first home purchase was often their forever home for several reasons. The first reason is one income was usually enough to afford a reasonable home for a young family to grow into. They also weren’t swamped in debt from student loans and credit cards freeing up more money for a down payment. The second reason is they didn’t buy the maximum amount of house they could afford. There is also the idea that bigger is better but that’s not always the case. Larger homes require more time and money to maintain; if the space is unused this is simply wasted money. First time home buyers may want to consider buying a home that will meet but not exceed their needs for years to come or consider holding off on a purchase until they are better able to afford a home that meets their forever home requirements.

First Time to Investment

Another option a first time buyer may want to consider is not parting ways with their first home purchase and instead turning it into a rental property. There are separate things to consider when deciding to become a landlord but if this scenario works well for your situation you could help recoup closing costs faster or actually see a profit each month from obtaining a tenant.

As you can see, there’s no set time frame for how long you should stay in your first home and it’s possible you may never part with your first home. We recommend that you consider your current needs, your anticipated future needs, and market trends to help decide your plan before ever making an offer on your first home.

Decisions Owners Renting Their Homes Need to Make

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Renting a house seems fairly straight forward, right? Create an ad, find a tenant, collect the rent. It’s not quite that simple though. There are a myriad of things you should consider before renting your home and once you do decide on renting you need to make decisions before you place that “for rent” sign on the front lawn.

Decisions Owners Renting Their Homes Need to Make

Representation

With websites like CraigsList, it’s easy to put together your own ad for the house you’d like to rent but what is going to set your listing apart from the thousands of others that are added every day? A Realtor can not only create an appealing listing but also market it as they would a property that was for sale. The listing created by a Realtor will also be available through the Multiple Listing Service (MLS) and be seen by other Realtors assisting potential tenants in the search for a home.

Price Point

Deciding how much to list your property for rent is probably the most obvious decision you’ll need to make. If you’re seeking the assistance of a Realtor, make him or her aware of how much your monthly mortgage payment is and any other expenses, such as an HOA payment, you expect the tenant to cover. A Realtor will be able to evaluate the area market and set a price that will maximize your income but also make the property appealing to a tenant. You should also decide if you will be willing and able to negotiate on a rental price.

Security Deposit

Local custom or law will most likely determine how much money you’ll require from the tenant to be held as a security deposit. In Florida, there is no law limiting the amount of money a landlord can request from a tenant to be held as a security deposit. Typically landlords ask for a deposit equal to one to two months’ rent. The higher the the security deposit is though, the smaller your tenant pool will be.

Rules & Regulations

As a landlord, you’ll want to make sure both you and your tenants are observant of local laws and community regulations. Make your tenants aware of the community quiet hours, trash & recycling practices, and parking requirements. You’ll also need to know what the tenancy capacity laws are and make sure your tenants adhere to the laws.

Pets

As the landlord, it’s completely your prerogative whether your tenant can house a pet in your property. If you prohibit animals, you may be, again, limiting your tenant pool. If you do allow animals, you can require a non-refundable pet deposit, usually $150-300, to cover the cost of hair removal, stain clean up, and damage not caused by normal wear and tear.

Making these decision prior to placing your home for rent, will allow you to make the most of your marketing efforts and find the tenant most suited to your property.

 

Ready to Own a Rental Property?

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You’ll hear the same advice from multiple professionals, if you want an asset that will continually appreciate over time real estate is the way to go. It’s true that real estate is a solid investment. Real estate investing isn’t fool proof though so, how do you know when you’re ready to own a rental property?

Finances

You shouldn’t go into a rental property without a solid financial footing. The same closing costs you encountered during your primary residence closing will be due when you close on an investment property. You’ll also need to be able to make any necessary improvements to make your property attractive to potential tenants as well as meet the monthly mortgage obligations until a tenant moves in.

Many investors use the equity in a property they already own to purchase another property. If you’re able and willing to use the equity in your primary residence you’ll possibly be able to pay cash or pay a sizable down payment to reduce the amount of money you’ll need to finance.

Ready to Own a Rental Property?

Business

Real estate investing is a multi-faceted business and you should approach it as such. Define your goals for real estate investing. Are you looking to make a quick profit or are you in it for the long term? If you’re in it for the long term you need to develop a budget for upkeep, marketing, general overhead, and unexpected issues. You’ll also need to determine how you’ll meet these costs, how you intend to handle emergencies and disputes with tenants.

Research

Purchasing a property that will costs a lot of money to repair isn’t necessarily worth the discount you many get on the price. The same goes for an immaculate home that will only rent for enough to simply cover the mortgage. You will need to research potential areas for not only home prices but also rental prices. Potential investors should also research the local laws related to rental laws to be fully aware of what is expected not only of the landlord but of the tenant as well.

Logistics

Finally, as an investor, you’ll need to determine how you’ll handle the logistics of being a landlord. You’ll need to collect rent, manage accounts, and maintain the property. If you don’t want or are unable to handle these issues you can hire a management company but be prepared to account for this expenditure in determining your profits.

Successful investing can be measured in many different ways. Defining your goals and assessing if you can reach these goals with the resources available to you will determine your ability to become a successful real estate investor.

Are You Prepared to Become a Landlord?

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Do you own a home and want to move but you don’t want to or can’t sell your home?  Perhaps you’re looking to diversify your investment portfolio and want to venture into real estate.  Becoming a landlord may be an option for you in either of these situations.  It seems like a straight forward proposition: obtain a property to rent, find a tenant, and collect your rent.  There is definitely more to it than that and you should examine yourself, your abilities, and your financial situation honestly before you dive head first into landlordship.

Are You Prepared to Be a Landlord?

Financial Security

As the owner and most likely mortgagor of the property, you are ultimately responsible to meet all the financial obligations related to a property.  The income from your rental property should cover the monthly expenses of the property.  You should be in a position to be able to make monthly mortgage, insurance, and tax payments should your tenant fail to make rental payments on time or if your tenant moves out and you’re unable to find a replacement before the next payment is due.  Be prepared to cover the cost of any unexpected repairs or legal fees, as well.

Maintenance and Availability

You’ll need to make yourself reasonably available to your tenant and the property.  Depending on their needs, you may need to respond and visit the property almost immediately (think burst water pipe or the heater kicks out in the middle of the night).  You may also need to visit the property to pick up the rent payment and maintain the landscaping.  If you’re not handy, are short on free time, or don’t live within commuting distance of your property, consider hiring a management company to take care of routine maintenance, emergencies repairs, and collecting the rent.

Organization

Whether you realize it or not, as a landlord you’re a small business owner.  You’ll need to keep an updated lease, records of each monthly rental payment, maintain an escrow account for the security deposit, and notate any repairs and damages made to the property during the term of a lease.

People and Business Skills

You’ll be dealing with people a lot during your tenure as a landlord and it won’t always be pleasant.  You’ll need to interview potential tenants and determine who will be the best tenant for you.  Should a dispute arise between you and the tenant, you’ll need to remain calm, cool, and collected even if your tenant does not.  You also need to be able to make sound business decisions.  You’ll have to enforce rules such as late fees, pet fees, and retain security deposits in the event of damage.  You may even have to proceed with an eviction despite any story that may tug at your heart strings.

If you feel you can reasonably meet these qualifications, being a landlord may be right for you.  Before you sign a lease though, talk with a licensed real estate agent for a valuation of your home and comparable rental prices.  You should also consult an attorney for help drawing up the proper lease documents and tenant notices.