Florida Property Management Blog from Florida For Rent

Rents have gone down a bit more steeply than they had been moving before. About six months ago - I try to look at regional statistics and then I consult the 'street' as well - it seemed rents were on a slight DECLINE of maybe 10% every year, whereas prior to that it was confusing as to why they were not regularly going up, as everyone seems to expect.  The slight decline was expected as the sales market / values started to drop. 

Landlords would ask me why rents weren't going up, as certainly with fewer people able to buy they would flood the rental market with demand - a reasonable assumption, and Renters would at the same time wonder why they (rents) had not gone down MORE, as with "nothing" selling there surely is an over-supply!  Ah the free market at work...

Well as of say a few months ago we noticed - my leasing agent and I, that renters were taking the time to look at many more properties than before, taking their time, more, and expecting more for less - sure signs of a Buyer's Market in rentals.

Well the reviews are mixed - but the above is true, and rents are coming down a bit more aggresively now. My advice to Landlords: Price carefully and realistically NOW, when you start, because the longer you wait the more likely your best rent rate is to escape you. A proficient rent analysis is worth thousands to you - especially now, when a single month of vacancy can cost you dearly.

Further, the tenants with the greatest qualifications seek the best deals, of course, and this includes not only the rent rate, but the location, mechanical soundness, cleanliness and appeal of the property.

The lease we use does NOT include a requirement that the tenant provide a written 30, 45, or 60 day notice to vacate with a penalty against the security deposit if the tenant does not do so, as I have seen in some other leases. The Florida Association or Realtors lease simply expires and requires a new lease for renewal.

It also does not include any provision to auto-renew as some leases do.

We simply monitor lease periods and contact tenants regarding renewal in good time, prior to expiration.  If the tenant renews we prepare a new lease and charge the landlord a $100 lease prep fee. At this point there are sometimes issues that get handled or negotiations that take place.

I read in FORBES, by the way (I am thinking of the slight decline in rent rates with greater supply and national economy, etc.) that we are in a state of DEflation of about 0.4%!

If the tenant plans to move we explain (as they ALWAYS ask) that their deposit will be returned AFTER they vacate, the property is clean and ready, we inspect it, report to the landlord and the landlord agrees to the deposit's release, or 30 days goes by - whichever comes first. But more on that in other blogs...

I have seen some leases that require a 60-day written notice to vacate or the tenant surrenders their deposit, but the FAR lease does not do this, perhaps fairly.

Licensed Florida Brokers are pretty clearly restricted to using the FAR provided lease - which is actually a great lease, by the way - and company policy is to ONLY use this lease so (1) we do not practice law without a license by writing legal documents for others, and (2) we do not spend countless hours reviewing and then "standing behind" leases given to us by others, although I have seen some very good "seminar" or "investor" leases of course.

A landlord can always retain us for marketing and management and prepare their OWN lease or addenda if they prefer.

But the FAR lease is an excellent, balanced lease with no unconscionable clauses, and very good other provisions, such as protecting the landlord if a tenant abandons...

It frankly never ceases to amaze me that some tenants are shocked when the home they decide NOT to stay in gets puts back on the market! I can understand that, as a tenant, you would like to be completely undisturbed and receive your deposit back on or even before you move out.

We NEVER tell new prospects to "go peak in windows" of occupied homes! We do tell them to drive by.

However, please see this from the landlord's view for a moment...  First, the owner is probably paying about $2,000 per month or more to own the home you're renting for maybe $1,100 or so. Second, it can be a catastrophe for the landlord to have that home vacant for almost any period of time. So it does make sense that the home be marketed PRIOR to your move-out, with your cooperation and agreement - to avoid financial loss - This is an investment for the landlord. And third, the lease provides for the home to be shown prior to your move-out, and I know I personally go over this in detail with every new lease I review with new tenants.

It can be simple, easy, and non-intrusive, but it is necessary to market homes prior to move-out.

Deposits can be held up to 30 days AFTER VACATING. I know what a problem this can be for some tenants, so for tenants on good terms (the vast majority) I, as a property manager, offer (1) to provide a great letter of reference which states how much of a deposit we are holding for the tenant, to the prospective new landlord, which often not only helps the new landlord approve the tenant but even accept the deposit straight from my company (if I have the tenant's written permission to do so) once it is released (and I never release a deposit without the landlord's written consent unless 30 days have gone by) - thereby relieveing the tenant of this financial problem.

Of course tenants who refuse to let the home be shown are actually in violation of their lease and can be evicted for non-compliance! Tenants who don't understand this or make a problem out of it unnecessarily of course have to be dealt with at arm's length, and should expect to be dealt with and their deposit returned as Florida law and their lease provides.

But there's no reason it can't be easy for everyone! In fact we often help tenants find their NEXT home if they move out of their existing one.

Please note that an eviction is a LAWSUIT filed to force a tenant to comply with a lease (usually by paying money owed for rent, or to comply with it's terms), or to leave. It depends on the landlord's intention as to what can be done once a suit has been started.

Very often back rent can be worked out with enough communication and a workable idea. A Property Manager can help as we have experience with all sorts of solutions, and can broker an arrangement if needed.

IMPORTANT NOTE - Evictions appear on your public records once they are FILED, and not only when they are complete. Just the simple filing of a suit - whether it gets worked out or not mid-stream, shows up in the future.

I have landlords who will listen to explanations and those who won't. Even the simple filing of an eviction suit is bad enough - It shows things deteriorated into a headache no future landlord will want.

Further, some landlord will file an eviction, have the tenant move, and not follow through with a "writ of possession" at the end as it was not necessary to get the tenant out and costs more money to obtain. Therefore even an incomplete eviction filing can mean the situation got as bad as it gets.

The point is - if you are a tenant - it's not just the completion of an eviction you should fear - IT'S THE FILING ITSELF!

Such can mean you will be banned from MANY good rentals in the future with no explanation even considered, or even if it got resolved, you may have to explain with proof the mitigating circumstances of the eviction, while other 'more qualified' applicants pass you by in the approval process.

So it's not just whether you got "kicked out" or not.

In this economic climate landlords are more receptive than ever to arrangements!  There is no good reason AT ALL to end up in an eviction suit!

Here's some quick advice if you're looking for a rental...

(1) There are lots of homes available now - In fact it's a bit of a "Buyer's (or Renter's) Market" now in that you have a lot to choose from. This is great...  you have more options, lower rents, etc.

In fact renting is smart right now, in my humble opinion...  You can rent a home, for example, for $1,195 that costs the owner over $2,000 each month to own - AND THE OWNER IS RESPONSIBLE FOR MAJOR MAINTENANCE!

It may be tempting to fall into traveling around and seeing LOTS of homes, but I would spend a little more time in my online data gathering and maybe drive-bys, and maybe even look forward to lower rent than I had initially expected to pay, or amenities which I was not sure I'd get - and get them!

Also the bottom of the market just may be on the horizon, so absolutely get a one-year lease OR MORE if you like the place. Even better, get a lease with a written option with first right to renew at the same or a pre-agreed upon rate NOW - Landlords may have brighter days in the near or not-too distant future.

It's okay to make OFFERS on homes - especially if your credentials are good. But also understand that if you have a previous eviction or a pit bull...  well, beggars can't be choosers sometimes!

(2) Ask for specific repairs or improvements WHEN YOU MAKE YOUR OFFER or submit your application. It can be a nightmare for everyone if there are issues that have to ba handled on the day your lease starts, and if not legally obligated, the landlord may refuse your requests - a bad start!

(3) Interesting point you may have run into - Some agents may not be very interested in helping you find a rental!

This is because agents who do not have their own inventory or rentals are likely to only receive about $100 for referring you to a rental, and before you say "But that's good money for a simple phone call!" understand that the agent may (a) not be familiar with how rentals work (even though they know sales), (b) feel ANY effort, research, etc for $100 is a waste of their time when they have sales listings and bigger fish to fry, and (c) have likely had bad experiences "chasing a hundred bucks" in the past. I remember - before I specialized in rentals - driving 45 minutes each way to be stood up by a prospective tenant and wondering who in the world would want to work with rentals!

That's why you need me! Or us, I should say - or better yet Randy - our superlative LEASING AGENT (727-678-4410). We carry a LOT of rentals and Randy - one licensed agent - is dedicated to ONLY handling incoming calls and arranging showings...  Well, okay he does more than that!

If you're in the rental market CALL RANDY, check out our listings at www.floridaforrent.net, or email info@floridaforrent.net for a current list.

We'll answer your questions - better yet we'll get you in our log so when something just right comes up it's yours!

DISCLOSURE - You know I'm not an attorney, right?  I'm a licensed real estate broker, so I CANNOT and don't intend to give legal advice, claim I am a law expert, etc. Do NOT rely on my advice as legal advice!

From where I sit as a property manager, the basis of the Florida rental business is the "Landlord-Tenant" Act (see our homepage www.FloridaForRent.Net for a link) of course.  I find it not only sane and fair but enlightened, personally!

Then there is legal counsel, which I often seek so I can proceded with confidence, knowing I am not causing delays or legally unfair treatment for neither landlords nor tenants...  and this can differ! Here is where interpretation can be a factor, however, the written laws are generally very clear. Thank you, Cicero! Thank you Pax Romana!

Then the final (or almost final) factor is the judge over any case you may be involved in.

Here's a quick fictional scenario...

A tenant is due $1,000 rent on the first and they have a 5-day grace period. My practice has been to treat the 5-days as CALENDAR days, to include Saturdays, holidays, etc. There are two instances I know of where in the contracts weekends and holidays are specifically excluded (Condominium 3-Day Right of Recission and 3-Day Notice of Termination for Non-Payment of Rent).  They still haven't paid after the 6th...

I issue a 3-Day Notice, demanding "pay or move" within 3 BUSINESS days.

Let's say they show up on the 9th and want to pay their $1,000 - If you accept the $1,000 you have legally waived the late fee for THAT rent period. You must refuse the rent until it includes the late fee if you want to collect it.

I (nor one of my attorneys) do not know of any provision limiting late fees. We often use $100 which is steep enough to deter. A judge can decide that a late fee is unconscionable, however. Judge Wapner had a "shock to the system" yardstick he used...

More on these legal tidbits to come!

Thanks for checking out my blog, by the way!

When we take on a property to get it rented we do an initial inspection to determine "rent-readiness" which includes a cursory examination of mechanical systems, cleanliness, landscaping, and overall curb appeal.  Recommendations are then made to the landlord, but by listing landlords agree for us to proceed with minor work to the property to get it ready.

This usually includes professional cleaning and changing the locks. The power and water should also be on - not only so the home can be cleaned and/or worked on, but so it shows well.

When we have a tenant the best guarantee that the new renter will change over utility services is for the landlord to give them a day or two and have the services shut off in the landlord's name.

Regular maintenance, then, through the term of the lease is requested by the tenant of our Property Managers, who have a wealth of reliable and reasonable tradespeople to choose from. Minor mechanical repairs (under $250) are simply handled and show up on a landlord's statement.

This is the ideal - You as a landlord sit by the pool and get a check and a statement each month without any of the headaches!

More major mechanical repairs (over $250) must be cleared by you, the landlord first, and we usually provide several bids. Note that Florida law requires landlords to maintain a property as to mechanical functionality and safety (and those who refuse to do this are called "slum-lords!") - DESPITE whether or not the tenant is current with rent!

If a tenant is late with rent this is handled purely with the proper notices, time periods and eviction if necessary - To tamper with the property or refuse to make actual bona fide needed mechanical repairs could give the tenant the right to withhold rent - or add damaging time to the eviction process!

I have found there are really very very few situations that cannot be handled on a human level between landlords and tenants, in fact that's our job - to manage these relations for you!

While there are management companies that obtain power of attorney or at least the written authority - or perhaps the implied authority - to approve or decline tenants on their own decision, at Florida For Rent we do not seek (nor want) such authority!

My belief is that the acceptance of a tenant should be the decision of the landlord, and my job is to market the property well enough that we get the best possible pool of candidates for any given property, process their applications, and then make a RECOMMENDATION to the landlord, but not decide for them.

You can take from the paragraph above that it does of course depend on the property, it's location and condition, and other factors. Someone with A+ credit, lots of cash and a perfectly clean history most likely not seek a marginal property, etc.

One landlord may be tolerant of past credit problems or even an eviction with a good enough explanation and proof (however rare), where another...  As long as the expectations match the quality of the property I have no issue with the landlord's views.

Choosing tenants is choosing - in a way - a RELATIONSHIP of a year and maybe more, and it pays to choose wisely, but unrealistic expextations can cost you TIME (which in landlord math = MONEY!)

We screen tenants for credit history, criminal record, arrest record, evictions, wanted persons, sex offenders, valid driver license, income & job history, and gather other relevant data such as children and pets, and very important - the personal meeting and interview.

We of course do not discriminate against any protected class. In fact I was asked a discriminatory question the other day, to which I had to answer,"I'm sorry - I can't even answer that question! We do not discriminate like that!"

People are going through tough times lately, and where the filing of bankruptcy used to be taboo years and years ago - it's almost considered estate planning these days to some degree (bit of a joke, but not completely!) Likewise today with foreclosures! Almost everyone has at least one...

But we DO indeed get very qualified tenants, and many, many of them have in fact become my friends!

In fact - I'll swear that just having a professional FOR RENT sign in your yard as opposed to a For-Rent-By-Owner sign will scare away the tenants not likely well-qualified. They come to expect (and fear) having to APPLY.

Please feel free to view our tenant application at www.FloridaForRent.Net, or email me (rodney@FloridaForRent.Net) if you have other questions, whether you're a landlord or a tenant!

If your renter did not pay or make any arrangement with you this of course is a red flag, and to be taken even more seriously in these troubled times...

However, as a do-it-yourself landlord do NOT make the mistakes of tampering with locks, utilties, making threats, in fact try not to even panic or get emotional!

The Florida Landlord-Tenant Act (see the link on our home page www.FloridaForRent.Net) was written by experienced, fair legal minds that have provided the LEGAL system of handling this situation very fairly, and very dispassionately.

The key to protecting yourself is following the letter of the law and acting in a very timely manner by serving a "3-Day" notice for starters, after the expiration of the tenant's grace period, if any. The notice can be posted to the door, served in person, or mailed by certified mail.

The notice cannot include late fees, but only make demand for the exact amount of rent that is late. If the tenant made a partial payment, the notice (or a new notice) must be issued for the exact amount still in arrears. A defective notice will trip-up your eviction suit if it comes to that.

Very often, this notice is enough for the tenant to take the situation seriously and make it go right to pay. At Florida For Rent, we offer tenants a written Temporary Hardship Form the TENANT must fill out to make a case for their being late, and for THEM to offer a solution, which is presented to the landlord along with our recommendation(s).

Late payers can ruin your month, complicated stories are of infinite variety and varying degrees of truth - so with all of our tenants everything is evaluated on a case-by-case basis, but with careful selection of tenants in the beginning, it's easier to have people you trust and are willing to work to keep in hard financial situations.

The Landlord-Tenant Act lays out the exact path to follow in Florida.

Outside of that procedure it can sometimes make financial sense to encourage a tenant hopelessly behind to move on their own free will with a financial incentive. For example, would you rather spend the next month and over $750 on an eviction or pay the tenant $500 if he moves in a week with the home in good condition?

It all comes down to the parties involved and their situations, of course...  And property management is many things, but "it ain't boring!"

Fortunately these situations are OFTEN worked out so everyone wins - this does occur!

It's not hopeless by any means! I have worked with several landlords in this position (you are NOT ALONE!) and been able, I'm very happy to say, to help them turn around their investment in a metter of weeks.

First, I have an extremely capable foreclosure defense attorney who can help take the sting and panic out of the situation, while we (at Florida For Rent .Net) check out the property to get any bad tenants out and prepare the property to be profitable.

I am working on having a great reference for a professional negotiator who helps landlords "re-strike" their loans and arrive at survivable payment schedules.

The coming solutions to the mortgage sitaution are bound to assist primary residential borrowers, and neglect investors, or course! Unless I hear otherwise!

So YOU have to be pro-active and handle (1) your loans if possible, (2) the property, and (3) get good management (I've heard GREAT thing about www.FloridaForRent.Net!) and turn that puppy around!

We have done this on several occasions, and always give FULL, WRITTEN disclosure to the tenants, to protect everyone involved.

On an occassion or two I have seen landlords rent month to month on a very discounted rate for properties they were losing, but we only deal with long-term rentals (over 6 months).

Email me at rodney@floridaforrent.net, because there are solutions you may not have thought of!

I was asked today by a landlord whose property we are about to market what I'm running into as far as tenants go, given the current and recently "officially acknowledged" RECESSION... 

Well I see it on the street, so to speak.  I have had two different recent applicants apply, get approved, one paid a deposit, and they both backed out because of a job loss.

People are losing their jobs. This has not yet seen the bottom, I believe. The best you can do is face that reality and prepare for it, and think about where you want to be when things finally do hit bottom and turn around again.

If you do that, I think it's kind of an amazing time of opportunity! I want a thriving property management company that delivers state of the art service with a great, great customer experience!

Frankly - this is not all bad news - as unpleasant as it may be to go through. This is a time of innovation, creating new markets, services, "cleaning house," etc. The biggest disappointment to me was the DROP in gas prices (and I'm not alone - a respected economist on Charlie Rose voiced the same concern) as the urgency to INNOVATE and get off foreign oil has been fanned to some degree.

Anyway - I know very well it can be rough for you, the landlord, and it can be just as rough for you, the tenant...

Renting is a GREAT DEAL compared to ownership right now.

Tenants should be very REAL about what they rent, and not sign leases for more than a year right now. Your monthly income should be at LEAST 3-times the rent, or more - preferably 4x...

And Landlords - If a tenant falls behind you/we MUST serve notice QUICKLY yet be prepared to make arrangements that will keep the tenant (if worthy) rather than risk vacancy...