Are you thinking of renting out your South Florida property?
Making the decision to rent out your property is one that can really help you solidify yourself financially and still help you to build wealth for the future. But in doing so, there are plenty of risks and skills you must acquire to really make the most of your investment.
Not taking the time to develop these skills will definitely negatively impact your rental property. So, we at Keyrenter South Florida have put together important things to know about renting out your home:
Develop Real Estate Skills
When you decide to rent out your home, you’re going to need to develop some basic real estate skills that will help you manage your properties successfully. These would include:
- Local real estate market knowledge.
- Tenant screening.
- Understanding the law surrounding the rental of real estate.
- Calculating the optimal rental value.
Understanding Your Responsibilities
When you enter into a rental agreement, as a landlord, you gain several key responsibilities under the Florida landlord-tenant laws. These would include, but are not limited to:
- Ensuring the property meets all habitability codes.
- Providing all amenities listed on the lease.
- Respond to and resolve maintenance issues.
- Treat your tenant fairly under the Fair Housing Act and Landlord-Tenant Act.
There are other responsibilities landlords must adhere to, so if you have questions please contact a property management company or legal professional for advice.
Drafting a Lease Agreement
A lease agreement is a document that governs and controls the specific interactions between a landlord and a tenant. This would include the rent value and payment periods, entrance clauses, cleanliness clauses, and much more.
So, an effective landlord must craft an agreement that makes every aspect of the landlord-tenant relationship clear. Generally, landlords have two options for drafting an agreement: drafting it themselves (or using a template) and having a legal professional or property management company draft one.
We would always advise having a professional draft the agreement. This way, every important aspect of the rental agreement will be clear in writing.
Make any Property Repairs
When prospective tenants view your property, they will want to know that every aspect of the property is in working order. This includes repairing any outlet sockets, maintaining appliances, and repairing any structural damage.
It’s always best to have a professional do this work. As poor quality work or work that needs to be completed, again and again, will influence a tenant’s decision to sign the lease or not.
Determining the Rental Value
Arguably, one of the most important aspects of getting a property ready to rent is setting its rental value. This value must give the landlord the ability to cover their costs while remaining competitive and fair in the local market.
Setting a fair rental value for your property sadly doesn’t have a one size fits all approach. Effective landlords must research and compare similar properties in the area to find where their property fits in.
If you’re not sure how to do this, it’s best to contact a property management company if you set your rental value incorrectly, it will either be too high to attract quality prospects or too low for you to maintain a healthy bottom line.
Costs of Renting a Home
One important thing to note when weighing the pros and cons of renting or selling a home is to determine the cash flow. Will the home be able to rent high enough to cover the payment and expenses? Some people like to keep the home as a rental property as it does aid in growing retirement.
Selling a home can place a tax burden on you if the home value is higher than $500,000, or if you are an investor and you haven’t been living in the home for the last two years. A rental home can be depreciated for taxes, which can help to reduce your tax burden yearly. Rental property owners can deduct several expenses from the home including:
- Repair costs
- Property taxes
- Community Association fees
Compare the current market value for the home and predictions for the future. Some people like to rent out the home for a few years as the property value could increase. However, if you are trying to upgrade to a bigger home, you may want to consider selling the home now to have more money to put into the new home.
Managing People and Property
A critical area of renting a property is being able to deal with people, and being able to manage the property. Will you be able to handle middle-of-the-night phone calls when a water pipe bursts? How about dealing with a person who won’t pay rent? Renters are notorious for not caring for the property in the same way as the property owner, so scuffs on the walls, countertop stains or burns, and other wear and tear will happen.
Keyrenter Property Management in South Florida is here to help property owners with tenant management. If you do not have the ability to manage the property, let us help. We are able to handle all the issues from tenants who refuse to pay, to make sure the property isn’t vacant for a long duration.