1.-Omission of the local legal system.
Ignorance or superficial knowledge of the real estate law of the State of Florida can lead to serious errors, especially when it comes to rental properties; errors that translate into loss of money and time. For example, in what cases it applies, how many days it grants and when and how to deliver notification of:
- Payment or delivery of the unit.
- Violation of contract with option to correct.
- Violation of contract with termination of contract.
- Disturbance to neighbors.
In the same way, before proceeding with any legal eviction procedure, different steps and notifications must be complied with, which can mean months of delay in the process, which is why we recommend having a lawyer specializing in evictions on your team.
2.- Do not pre-qualify tenants.
Pre-qualifying potential tenants is one of the most important processes in this business and many landlords overlook it. Despite the negative impact of having the property vacant, accepting a “non-pre-qualified” tenant often comes with greater expenses and headaches in the long term. Establish a pre-qualification system and stick to that criteria; It is important that you take into account local regulations “Fair Housing Laws”. Some of the most common elements of prequalification are:
- Criminal record.
- Credit report.
- References from previous landlords.
- Job references.
- Personal references.
- Average time lived in each property.
3.-Ignorance of local regulations.
Most lawsuits against landlords result from violations of the legal system that protects tenants from “Fair Housing” discrimination. Despite this, many owners pay little attention to these regulations as they use their “common sense” to not discriminate and unfortunately their “common sense” often violates the regulations established in the law.
These regulations apply not only to the pre-qualification of the prospective tenant, but also during the landlord/tenant relationship.
Within the regulations, it is prohibited to discriminate based on:
- Race.
- Color.
- Religion.
- Origin
- Sex
- Family status.
- Physical disability.
4.-Ignorance of the Local market.
There are different tools and systems that allow you to determine, in a specific development or building, the following:
- Actual rental price for specific periods.
- Time units spend on the market before being rented.
- Direct competition.
- Demand.
- Price per square foot or square meter.
It is not only important to know this information when purchasing the property or when listing it for rent; More importantly, it is being able to constantly monitor the market to make decisions at the time.
5.-Absence of strategy.
As an investor, it is essential to know the behavior of the local market or have a real estate advisor who has this knowledge.
- Would your pricing strategy be different if you were competing with 1 property instead of 10?
- If families predominate in the area, do you think it is easier to rent a 1-bedroom property or a 3-bedroom property?
- If the area is mainly single executives, do you think it is easier to rent a 1-bedroom property or a 3-bedroom property?
- If properties take 45 days on the market before being rented, what strategy can you use to speed up this process?
6.-Absence of preventive maintenance.
Most owners only pay attention to the property when a problem occurs. Without a doubt, preventive maintenance is usually cheaper than a repair or replacement. Depending on the year of the property, the equipment and the conditions in which they are located, it is recommended every 6 months to carry out preventive maintenance on household appliances, air conditioning systems, plumbing and possible leaks. Additionally, preventive maintenance allows you to see the conditions in which the tenant maintains the property and allows you to see if people or pets not authorized in the lease contract live in the property.
7.-Lack of a good contract.
The rental contract is your first and greatest protection. It is very common to see investors who dedicate a lot of time and effort to purchasing the property and then try to save money by buying a “template” on the internet that serves as a “standard” contract. It is very important to keep in mind that the contract is the main legal protection where the terms, rules and regulations that support the agreement between landlord and tenant must be very clear. It is always advisable to have a lawyer in this matter to help protect your interests.
8.Absence of equipment.
An essential part of this business is creating a team of experts in different areas to help you invest and manage your investment. Each member must contribute and provide solutions in their field of experience. The basic team is made up of:
- Real estate broker.
- Property manager.
- Accountant with experience in real estate.
- Eviction lawyer.
