6 Property Management Rules From the Rental Bible

Here’s some landlording rules that will make your landlording a more enjoyable and profitable experience.

RULE# 1. Acquiring your tenant – the first step in making property management easy on yourself is picking the right tenant. That means selecting a tenant that loves your place and not just likes it because a loving tenant is a long term stable tenant. You say ‘How do I know when someone loves my property?’. Simply put, you can see it in their eyes. Typically, after you show the property, the loving prospect will say “What do I have to do next? ” and have a deposit waiting. If they leave your place saying” I still have a couple places to see it”, that usually means that the prospect is making a safe exit, making sure the door doesn’t hit their behind on their way out. Make sure their deposit is in secured funds like cash,money order, or cashier check if the move in is a rapid one. Check is fine as long as you have about 10 days ahead of move in or have checked the account personally as a check can come back bad several days later due to a bounced checked or a stop payment.

RULE# 2.-The Lease- A valuable piece of documentation is the lease. It states the rules of the house, when the rent payments are due, the rental duration, what happens should things go wrong or tenant doesn’t comply. This is valuable should you have to go to court.

Rental agreements can’t be created by you, they must be created by an attorney. The specific points in the lease must coincide with landlord-tenant state laws. You can purchase a law approved agreement and add items to the addendum section if need be.

RULE#3. Rent Payments- Rent payments should be check or money order. Why you ask? It creates a trail should you need it in court to prove rent payments were made or not. If you make this your rule then its hard for the tenant to dispute that rent was paid when it really wasn’t. The tenant also wouldn’t be able to say that his room mate stole the cash or similar. I always give a receipt upon rent pick up. You may also make payments convenient to the tenants by allowing them to do bank deposits. Simply make out several months deposit forms in advance with your bank account number on each.

Late payments should require a penalty after a grace period. The grace period is typically 3 or 5 days. After the grace period, either charge a percentage of the rent or state a flat fee. Typically charge is 5 or 10%. You have to have them feel a little responsible for the paying the rent.

Partial payments can cost you. Once you accept a partial payment, you’re giving permission to the tenant to stay and possibly forfeit the balance of the month by law. Partial payments should be accompanied by a receipt stating the remaining balance and when it should be paid.

RULE# 4. Security- Typically a month’s security is held to compensate you the owner should any destruction occur to the rental unit. According to Florida law, that money should be put in a bank account with the tenant being given the bank holding it and also stating if an interest account, who gets the interest and approving that with the tenant.

Security is not to be used for rent. It’s your one leverage tool to remain at your side. Once allowed to be used as for a missed rent payment, the tenant could do anything to your premises and you have no compensation. The tenant may after using it say that he changed his mind about moving. That leverage would be gone permanently.

RULE#5. Maintenance- Remember that a happy tenant is a long term tenant. That means that when he calls, you respond with good speed. In so doing, you protect yourself against tenant excuses for not paying rent. If there are excuses, they will surely surface at rent collection time.

Have your team of maintenance pros on hand. If you’re on a low budget then hopefully you have handyman skills. If not try to get a talented handyman. You’ll need specifically on your list an electrician, a plumber, a general handyman, and a landscaper. Electrical and plumbing work is so specific skill sets that you need specialists. A handyman may be able to do a variety of tasks like tiling, carpentry, and even roofing.

Arrange a time to do the work. Give 24 hour notice of work to be done. As long as you stick with the schedule,there can be no complaint from the tenant about you not taking repairs seriously.

Maintenance doesn’t mean room service for every everything that “breaks”. Replacing light bulbs should not be part of maintenance except upon move in.Tenants need to learn this from the beginning else you’ll have an unbelievable number of repair calls.

RULE# 6.Tenant Evictions- Unfornately, sometimes you have to remove a tenant from the property. Maybe this happened as a result of non payment of rent or misbehavior that violates the lease.

For rent non payment, this requires a 3 day notice to evict in Florida. Other violations of the lease require a 5 day notice. The notice should be delivered in person or posted on the door if not there and a copy left in the mailbox. I tend to take a snapshot of it posted on the door with a timestamp. After the 3 or 5 days, its up to you the landlord to file a complaint with the clerk of court and carry through the eviction. Remember that the 3 or 5 days doesn’t include holidays and weekends.

Remember eviction is a last resort, communication should be used first. Eviction means communication has broken down and the relationship cannot be mended. If late rent, ask why. Is there a work related problem? Does the tenant have a plan to resolve the issue? If a behavior related problem, can the tenant curb their behavior?

Eviction can be a lengthy process. It can take months in some states or as little as 2 weeks in Florida which is landlord friendly. You as landlord stand to lose a month’s rent plus evictions costs but if they don’t communicate with you then by all means do the eviction. A number of tenants are betting on your delay and that delay usually costs the landlord a few months of rent.