Renting & Rental Tips
BEWARE, THERE ARE THOSE HOMEOWNERS THAT WILL PUT UP THEIR HOUSE FOR RENT WHEN THE LOAN IS ACTUALLY IN DEFAULT. THIS IS A TERRIBLE THING, ILLEGAL AND UNFAIR TO THE TENANT.
Youve purchased income property and are getting ready to rent it out. Creating a solidly worded lease now becomes a priority. A lease details owner and renter obligations, specifically with regard to fees, upkeep, and property damage. There are several key elements you must include in the lease documentation.
If you dont feel comfortable in creating your own leases there are several places online that have free legal documents that you can download and personalize. Or, if you have an attorney that person can create a standardize lease for you to use on any income property.
Managing rental property takes a lot of work and a decent amount of know-how. Step one in this process is finding a good property to use for rental purposes. The buildings location is very important as is the neighborhood. You want an area that illustrates stability so that should you decide to re-sell down the line, your investment is safe.
In looking at the various potential properties dont only think about the mortgage. Consider how difficult the property will be to upgrade and maintain. Safety, security, and attractiveness all matter to potential renters. Additionally as a landlord there will be specific zoning laws to which you must adhere. Do your research so you know what to expect.
After locating a suitable property youll have to finance it. Owner occupied buildings with less than four units arent regarded as investment buildings so you wont have to come up with a huge down payment. By comparison the absentee landlord with more than five units has to pay larger down payments and higher interest rates, usually as much as 30%. The risk factors for investment properties is always higher, and gets reflected in those percentages and rates. Note that Adjustable Rate Mortgages arent recommended for rental properties. If the rate goes up substantively theres no way youll be able to adjust rents to cover the additional expense.
There are other costs too. For example, your property insurance and taxes are going to be higher when you rent. Since the landlord doesnt have 24-7 control over the property, renters represent a damage risk. Additionally its a good idea to have liability insurance on the property in case of personal injury lawsuits. Note that the cost for insurance, the interest you pay on the mortgage, and some of your rental property repairs and renovations are tax deductible.
The Tennant Equation
If finding a good property and handling all the financials wasnt complex enough, now you have to find tenants. Its strongly advised that you screen tenants using credit checks, bank references, previous landlord recommendations, and employment verification. Additionally get a security deposit in the form of a bank check. If you want extra verification you can pay for a renters evaluation through a national database. This costs about $25 each and will tell you if the renter has a criminal record too.
After a tenant moves in, its time to consider how you want to handle complaints and rent payment. Complaints are best handled in writing so you have a document trail (this protects you and your tenant). Rent receipts are also a very good means of keeping track of things. Note that some landlords encourage timely rental payments by offering a small discount to individuals who pay early or on time.
This is only a very small portion of the overall landlord equation. For example, what happens when you want to go out of town? Who will handle things in your absence? How will you handle renter-to-renter issues? What do you do when someones in arrears?
These kinds of questions makes it clear that becoming a landlord isnt something to do on a whim. Educate yourself, get advice and input from your accountant or tax advisor, and really take your time. At the end of the day ask yourself if you want to trust 4, or 5, or 6 complete strangers in an investment property. If the answer is no, being a landlord is not for you.
Sometimes it simply isnt feasible or practical to buy a home or condo. That leaves renting. Because almost every rentable space has a contract attached, finding the right space is nearly as complex as is buying a home. How do you go about this process so that you find the right apartment that also suits your budget and lifestyle?
One answer is to read consumer reviews. Use discernment. Some of these reviews are written by tenants with an axe to grind. The complex might actually be wonderful, but there are some folks who just like to complain. Other reviews may be written by paid professionals who have never even SEEN the place. Obviously, those arent overly dependable. That leaves you with trying to talk to current tenants or neighbors, which is really the best option. It will give you a feel for the people who you may soon be living near as well as a current assessment of the property from an insider view.
The fair housing act went into place to protect prospective renters from discrimination. The long and short of fair housing is that its illegal to refuse to deny dwelling, or set different terms on rental based on a persons religion, race, color, gender, marital status or handicap. This law applies to advertising too. Any statements that imply that a space only accepts certain type of renters are, for the most part, against the law (there are a few exemptions, but theyre pretty specific). For individuals with disabilities the protection extends even further. For example, if you need a wheelchair ramp put in, you are legally allowed to do so at your expense. Likewise if you need a guide dog, buildings with no pet policies must allow that animal on the premises with you.
If youd like more information on fair housing, go to HUDs website.
Pushing through the Process
When youre ready to apply for a rental, there are things you can do to make this process go faster. For example, bring letters from previous landlords attesting to their experiences with you. Likewise, bring a recent credit report. That saves the landlord a lot of time and illustrates upfront that youre able to afford the space. Hint: read over your credit report carefully. If you find mistakes, get them cleaned up before applying.
If your application goes through, step two is the lease. You may want to ask if the landlord offers short term leases. That way if you find out the space isnt what you hoped, you can move after three months. Otherwise normally youre locked in for a year.
Review your lease with the same diligence you would any other legally binding document. Be aware that some rentals forbid you to make any changes in the space, or run a business in the space. Additionally your lease should detail what situations allow your landlord to enter the space (and how much notice they must provide). Privacy counts.
This is the time to get everything in writing. For example, if you speak with the landlord about necessary repairs, get documentation that the landlord has agreed to those repairs. This avoids a lot of misunderstanding. Oral agreements only go so far. Then if everything looks amenable, sign on that dotted line.
Insurance and Security Deposits
Before you move its a good idea to get a renters insurance policy. Your landlord insures the property, not your personal possessions. Should anything go wrong, renters insurance and help you replace stolen or damaged items. The cost is very reasonable for the peace of mind provided.
Speaking of which, on the day you receive your keys there are things you can do to safeguard your security deposit. I recommend taking pictures or a video of the entire space, making particular note of anything that needs touching up or repair. This way the landlord cannot claim you caused those problems when you move out. Note that these pictures can be very useful for your renters insurance too; they prove what you have in the building.
As I was having my coffee this morning and reading the paper, I saw good news for a change. Our economy in Hernando County is improving. As a realtor, I have been very busy, but there are so many negative people who say, "no" it's not. I thought maybe it was a fluke and my business partner and I were just having a good year.
However, the proof is in the pudding or the numbers, whichever you like. Home sales, foreclosures filings and building permits issued for single family homes, all moved in a positive direction this first quarter. The University of Central Florida economist Sean Smith did a report and predicted that the worst of the recession is behind us, but it may take some time before things return to normal. It is a start out of the recession.
Hernando County comprises Spring Hill, Brooksville and Weeki Wachee. We are the home of the mermaid show at the beautiful Weeki Wachee Springs. We are located on the Gulf Coast and have a small beautiful beach called Pine Island. If you want all the amenities on a smaller scale without all the congestion, Hernando County is a wonderful place to live. I moved from Long Island, New York about six years ago and love every day. Even though I am working, I feel like I am on vacation. The pace is slower, the people friendly, and it is a very pretty place to live.
Hernando County which suffered because we did count on the building industry for jobs and went that tanked,we had a high unemployment rate. That is slowly starting to recover. Single family home sales according to Hernando County Association of Realtors Multiple Listing Service increased by 14 percent the first quarter of 2010, and 34 percent since the first quarter of 2008. As a realtor, I know that a lot of people were taking advantage of the first time homebuyer credit which expires April 30th (you still have time to get into a contract). However, we have quite a few buyers who are smart enough to know they will not see home prices this low again, and whether they are a first time homebuyer or not, they are taking advantage of the prices and low interest rates. Sellers also need to know that there are many buyers out there and if they are motivated to sell, this is actually a good time to get a buyer. Call a realtor to get a home evaluation; most realtors don't charge for this service.
As we all know, real estate is a roller coaster but we are on our way up again. Let's stay positive.
Have a good day and enjoy!
We will always keep you posted.
as forclosures claim more casualties tenents living in forclosed properties are no longer going to be victims. The Protecting Tenants at Forclosure Act requires the purchaser of a forclosure property most often a bank to give a tenant at least 90 days to vacate the property. a tenant with a written lease must be allowed to live in the property for the remaining lease term unless it is sold to a buyer that is using the home as their primary residence then the tenant must be given the 90 day notice to vacate. Thus giving the tenant enough time to find a new home.
The "Protecting Tenants at Foreclosure Act" became effective May 20, 2009 which requires the buyer of a foreclosure sale (which most often is the foreclosing lender) to give a "bona fide tenant" at least 90 days notice to vacate the premises. In regards to a "bona fide tenant" it is referring to a tenant that has a written lease or a month to month lease and must be someone who is not the original homeowner and pays a fair market value rent.
A renter with a written bona fide lease must be allowed to live there for the remaining term of the lease unless the property is sold to buyers that will use it as their primary residence at which point the tenant has been given 90 day notice to move out. So the date of sale becomes the termination date of the rental lease. At least valid renters in this situation will have at least 90 days to locate another home to rent.
Be careful when you rent, check out the landlord. Usually it is the landlord checking out the tenant, but in this economy there are people just trying to get money any way they can, even though it can hurt someone else. Your landlord may be losing the home you are renting.
Landlords who know they no longer can afford their home are renting it, but the renter comes to find out, the home is being foreclosed on, and they living there is no longer a feasibility. Besides the harassment of notifications, there are no repairs being done and you have lost your security deposit. You can of course attempt to get it back through the court system, but this landlord has no money.
If you can at all purchase a home, there is probably no better time. Interest rates are at their lowest, prices are at their lowest. If you are still fearful of owning a home, call a mortgage lender today and see what you would qualify for - you might be surprised that you can purchase for what you could rent. There are programs in the Hernando County area (Spring Hill, Weeki Wachee and Brooksville) that qualify for USDA loans (no money down). Once you know that you are comfortable with a payment, call a Realtor to find your home. Why give the landlord your money.
We will always keep you posted.
Have a great day and enjoy!
It seems that more people are taking advantage of renters by this new type of scam - they will advertise a property cheap; when the renter e-mails the landlord (which seems to be the way they communicate), he/she tells them they are out of the country and can't show them the property. They also won't hand over the keys until they send this large deposit via moneygram or Western Union, which is hard to retrieve.
The people show up and find the home is occupied. Why anyone would send money without seeing a property first, I am not really sure. Just remember, when it "seems to be too good to be true, it probably is".
In this market, if you can rent, you probably can buy - talk to a lender and a realtor today!
With the three hundred or so foreclosures being filed monthly in Hernando County Florida a renter needs to do some of their own background check on the landlord before signing on the dotted line.
You as a prospective renter will usually be asked for a background, employment and credit check before moving into your new home. I see horror stories everyday where a very innocent renter and family is being kicked to the curb because the bank foreclosed upon the mortgage. Usually the renter has 30 days to find a new home and they will most always lose the final month's rent check and security deposit.
What can you do if you are thinking about renting and you want to check out the landlord as they demand from you? Go the the Hernando County Clerk of the Court website. Check the official records section. Enter the landlord's last and then first name. Click search, and the site will show you any and all impending actions against the landlord's property if they exist.
12500 Maginn Ct