The 7 steps of landlording below, are for do-it-yourself owners thinking about tackling the landlord job themselves. These are the main functions of a landlord. Setting these steps up successfully will provide the groundwork needed to have more control over the unexpected issues that inevitably arise in dealing with rental property. Avoid bad tenants, they can cost you lots of money!
7 steps of landlording starts with HOW you fill a vacancy. First, the goal is NOT to have one! Vacancies mean lost income. But when you are in between tenants... when there's no rental income coming in, the first thing to do is give yourself the most options possible. Advertise your rental to attract the best qualified tenants. Don't just pick the one person that saw the sign in the window. Why? You want to give yourself options to choose from. You want to be able to pick THE BEST tenant possible to rent to, which will ensure way less headaches in the future.
There are lots of ways to get your phone to ring with interested renters on the other end. And chances are, you'll get calls at all hours of the day and night depending on the location and rental amount.
So what IS the best quality tenant to look for? Tenants that have a stable income, are responsible and pay their rent on time, and care about how they live keeping your rental property clean and well maintained.
You've set up your groundwork for letting prospective tenants know you have a rental available, online and with family/friends. Calls and emails will start coming in soon! Now what??? The second of our 7 steps of landlording is probably THE most important! Strict, diligent tenant screening is the key to avoiding potential costly pitfalls.
We recommend providing every prospective tenant with a Tenant Application to fill out. 7 Steps of Landlording includes using a GOOD tenant application that asks all the important questions you need answers to! It's essential that the application you use asks for all the basics, references, employment, income... but you'll also want to know about other occupants, kids, pets, make/model car, social security number. There are many forms available to use, but make sure the one you choose will give you the information you really need.
The more strict you are with the "application process", the more your tenants will take you seriously as a Landlord, and the lower your risk will be. In addition to the obvious: protect your investment and don't take a tenant out of desperation or frustration. It will NOT be worth it in the long run! *Consider using a rental property management company to provide these services for you. Charges usually range from $75/month to a percentage of rent collected. And this expense is a tax deduction* (always check with your tax preparer).
Download a Tenant Application pdf here
This step is the most important of all 7 steps of landlording, because your lease is the roadmap for this tenancy. There is no greater difficulty in a tenancy than having issues and not being able to enact any real solution. If the lease you used is weak or doesn't address the most common issues that come up in tenancies (for example, early termination), chances are you're simply going to lose. You'll lose time and money. The best leases come from attorneys and property management companies that have developed leases over many years to address virtually every conceivable issue you could run into, while adhering to current Landlord/Tenant law. While these leases are designed to protect the Landlord, they are also made to be completely fair to the tenant and will thus be upheld the most if taken to court for any reason. We've seen it time and time again... Landlords create their own leases, or use the standard 2 page State lease provided by their Realtor... only to realize when it's too late that there's little course of action to take or ability to recoup loss, in a problem tenancy. Make sure any lease provision adheres to state landlord/tenant law. If anything goes to court, that law will almost always win over anything you include in your lease.
Step 4 in our 7 steps of landlording is NOT TO FORGET YOUR CONDO OR HOMEOWNERS ASSOCIATION! They hold a ton of power over your property (and you!). As an owner, you should have a full set of condo docs. Make sure this includes the most recent FAQ and Rules sheets and any recent amendments to bylaws that may affect your property and renting it to a new tenant.
Before a new tenant can move in, make sure you understand how condos and rentals work in your community. How long do they take to approve? How much do they charge to apply? This is all information you'll want to give to your prospective tenant up front. Have your new prospective tenant seek approval from any applicable Condo or Homeowner Association as soon as possible. Make sure to provide all rules to your new tenant, that you expect them to know. And make sure you keep copies of everything you give to your tenant. Cover your bases and avoid potential issues your tenant may have with your condo association. Or these issues could end up costing you a lot of money. For more information on condo docs, how to obtain them, etc. click here.
Make sure you meet with your new tenant to hand the keys over and collect their move-in money, AT THE PROPERTY. This is the best time to walk through the house and point out the things you want them to know. For instance, show them where the AC unit is and how to change (or clean) the AC filter. Show them where the main water valves are, and how to turn them off in the event of a water leak. Make note of any cracked tiles, nail holes in walls etc that are exist prior to the tenant move in, so you remember NOT to try to claim repair expenses from their security deposit later on. And most importantly,
TAKE PHOTOS of the everything. You want a record of the condition of the property. Make sure you take photos of every room, flooring, carpet, fans, doors, AC filter (clean condition), yard etc. This set of photos you'll use in a year or more, for determining security deposit claims. The Move-In is normally when you collect first, last month's rent and security. We recommend requesting in advance, that the tenant pays this move-in money with cashier's check or money orders (cleared funds) only. You DO NOT want the initial move-in check to bounce!
This is also the point at which you can most effectively explain your expectations to your new tenant. For instance, point out if you've just had the entire place repainted. If you had brand new carpet installed, make sure to point that out. Explain to the tenants that you expect them to keep the property clean, like you are giving it to them that day. Did you just have the yard mowed and trees trimmed? If the yard maintenance is the tenant's responsibility as per the lease, make sure you point out the condition you are handing it over to them - and that you expect it to look like this when they hand their keys back at the end of the lease. More on Move-ins here:
There are very strict rules and regulations for holding security deposits. Remember, security deposits are the TENANTS money! Landlords simply HOLD this money just in case the tenants don't adhere to any clauses in the lease or law. Make sure you read up on how you are, and aren't, allowed to hold this money. And make sure, with move-outs, that you follow landlord/tenant law very carefully.
Fill out the correct paperwork if you are claiming any portion of security, and return any remaining portion within the legal timeframe. It's always a good idea to have documentation (repair bills or estimates, photos of move-in versus move-out comparisons, etc). If you make a wrong move, the tenants can take you to court. And judges don't take these things lightly. They usually don't show sympathy to landlords who show a lack of understanding or interest in following the law. More about move-outs here:
We've found that new landlords often think it's best to be nice, to show patience. They believe that if they try to work with the tenant, that the tenant will do the right thing. Late rent? The new landlord will more often than not say "your rent was due two days ago, but okay, you can pay it next week". Really? Was that the legal agreement? We recommend approaching your landlord role as a job. Your rental property is your business, your rent is your income. If rent is due on the first of the month, and considered "late" on the 5th... make sure to post a Three Day Notice on their door on the 6th.
Sound harsh? Maybe. But it sets up the expectation that everyone needs to adhere to the legally binding lease. Setting yourself up to be the landlord, and not the friend, ensures greater success along the way when other unforeseen issues arise. For instance, did you give them permission to have one dog. And you learned they now have two? That's a violation of the lease. Do you require they get rid of the unauthorized dog, require additional security, raise their rent, terminate their tenancy, or don't say anything and let it go? [Hint: it's NEVER advisable to simply "let it go". Remember, this is YOUR property].
Read up on landlord/tenant law, google some case studies. Prepare yourself to handle the common issues that can arise. The more you are prepared, the more success you'll have in avoiding costly pitfalls, and ensuring your rent comes in every month on time, and your property remains in good condition.
Florida Landlord Tenant Act
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