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I came across this post, Why You Should Buy a Rental Property and when I read, “The best investments we’ve made are the ones no one else would touch.” I can see why David Ackman is hot on the Single Family Home Rental Property.  “They are cheap,” he says.  “They are a buy.” All I have to say is I agree 100%, properties are cheap in many areas of Brevard County as well as the entire state of Florida.

Now is the time for investors to scoop up these properties priced drastically below market value. My long time experience as a property manager not only helps investors determine where to buy for the best rate of return, but I am also able to provide the services of managing properties and help protect their values. By conducting regular inspections, my team and I are able to determine if the property is being maintained and to check for issues tenants may not even realize are problems.

With all of the short sales and foreclosures there is a growing need for rental properties. People coming out of distressed sales need a place to live. Most of these people make excellent tenants, they’re just victims of the economic disaster.

Why should you buy a rental property? Because the time is ripe to buy not one, but maybe two or three rental properties. When the market rallies back to stability selling them should produce a very nice profit.

 

Link to the article:

http://www.noradarealestate.com/blog/why-you-should-buy-a-rental-property/

 

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     Many times, a landlord must enter a tenant’s apartment, condominium or house to do repair work.  In this instance, at least twelve hours notice must be given by the landlord to the tenant.

     Florida State Law, FS 83.53 provides that the landlord may enter the rental “upon reasonable notice to the tenant and at a reasonable time for the purpose of repair of the premises.” Note that this is access for repair only. Reasonable notice for repair purposes is “notice given at least 12 hours prior to the entry”. Reasonable time for repair is “between the hours of 7:30 a.m. and 8:00 p.m.” Outside of consent, the most common method to gain access for repair is by posting on the door a notice to enter the next day. Although the statute provides that 12 hours is reasonable notice, the 12.5 hour reasonable time window for access makes same day notice and access totally impractical for non-emergency repairs.

     Because the statute provides for a 12-hour notice and 7:30-8:00 time for repairs, these have become the safe harbor as reasonable notice and time for all notices and entries. If the entry is for something that a reasonable person (read here “a judge”) would think needs more notice, then more notice should be given. While a day’s notice may be sufficient for repair of the sink faucet drip, more notice would be reasonable for carpet replacement, when the resident would be required to clear a room or rooms of everything but furniture. Landlords are reminded that the preferred method of entry in all situations is a mutually satisfactory time and date with the resident.

     Last time we discussed the Landlord’s legal way to enter a tenant’s apartment, condominium or house and the importance of including reasons for entry in the lease.  No landlord wants to be confronted by the tenant’s lawyer for violating the tenant’s right to privacy.  This week we discuss consent by a tenant, written, verbal or implied.

     When a tenant signs a lease on an apartment, condominium or house, there is tacit agreement that the landlord may enter due to a busted pipe or other damage.  The basis for this access is the “implied” consent of the resident allowing entry in response to the resident’s request for repair, or the lease obligation to provide periodic service or maintenance. A landlord’s reliance on implied consent may be more reasonable when it is in response to a request for maintenance or repair. A landlord’s reliance on implied consent may be unreasonable when service or maintenance is conducted that is infrequent and likely unexpected by the resident, such as unannounced service of the smoke alarms or air conditioner.

     The most common method of gaining access is obtaining consent of the resident, whether it be for inspections, services, repairs, or showings. In response to a phone call or email, the resident approves the entry into the rental. If the resident’s approval is over the phone, the landlord should make a note in the resident’s file of the authorization, including time, date and initials of the staff member who spoke to the resident.

WITHOUT EXCEPTION

     So, you have a couple looking at one of your open units at your condominium building, very personable and they look like a responsible pair of people. You check their backgrounds and see some financial information that causes you to re-think their application. However, you want to rent the unit and you now want to place a clause in the lease that provides in the event the resident files bankruptcy, you as the landlord will be excluded from the effects of the bankruptcy, and that the resident cannot use the bankruptcy as a way to stop or suspend paying the rent.

     Sounds like a great idea but it is not possible. If it were possible, then every creditor would have this type of clause in their contracts.  Their lawyer and the judge would laugh you right out of court.  These clauses are completely unenforceable, however badly you want to cover all your bases. When you own or manage a building full of condominiums or apartments, all landlords take a risk that their residents may file bankruptcy, and there is simply nothing you can do about it.

     If you receive notice that your resident has filed bankruptcy, call your attorney immediately.   Your attorney may or may not be able to place a lien or something similar on their income, other property or anything he or she may be able to find.  Get to know your eviction laws in your city, county and/or state as well. See what you can do to protect you and your property.

     There comes a time when some tenants want a month-to-month lease (or a non-renewal).   It could be a college student who is in their last year and doesn’t want to get stuck owing months of rent that’s left on a lease.  It could be a family buying their first house and requires a few months to get everything together.  Or, they’re looking for what they feel is a better bargain in another complex, house or condominium.  Regardless, how do you, as the landlord, handle the end-of-term notices?

     First, what is a month-to-month?  A month to month tenancy is created when the landlord allows the resident to stay after the expiration of the lease agreement, or in the event that there was never even a lease in the fist place and the resident pays monthly. The resident presumably continues to pay the rent money until such time as either the landlord or the resident decides to terminate the tenancy.

     What about the rent and notice?  If there is a short-notice (usually less than 15 days) the renter typically owed for the entire month.  The landlord’s non-renewal notice to the tenant must be accurate concerning this date. It is usually a good idea to “cross-notice” the resident with your own notice of non-renewal.  Please see your real estate attorney for a proper notice or cross-notice.

     Be careful with partial-acceptance of rent for the last month.  Often a resident will not give you proper notice OR will give you a partial rent payment covering the time period in which they will stay. If you accept that partial payment, you may be accepting the “terms” of the resident’s notice, be it proper or improper. If you take a partial rent payment when the resident has given you insufficient notice, you may not be able to charge the resident for the remaining days in the month in which he leaves, even if he has otherwise given you proper notice.

     Let’s say you’re a landlord who’s got a tenant that’s been paying late for a few months or usually pays half her rent on the sixth (after the fee start date) then pays the rest at the end of the month.  You accept the partial payments because, well, gosh darnnit, you’re so nice and you feel sorry for the renter. She comes up with sob stories and excuses that are always out of her control.

On the seventh month, you get tired of the constant late payments, whining and excuses.  So you start eviction procedures and wish her well. 

     In court, you see an attorney by her side; she’s looking pretty happy and snappy. She looks at you and winks.  Her lawyer pipes up and asks the judge to throw out the case based on the doctrine of Estoppel. The judge agrees. The same result often happens when the property manager constantly accepts partial payments.

     Courts will rule that the doctrine of estoppel will apply if : 1. Words and admissions, or conduct, acts, or all combined cause another person to believe the existence of a certain state of things 2. In which the person speaking, admitting, acting and acquiescing did so willfully, culpably, or negligently, 3. By which such other person is or may be induced to act so as to change her own previous position injuriously. What does that mean? If the property manager is giving the impression to the tenant that the terms of the lease need not be followed, then the landlord seriously jeopardizes her ability to enforce the terms of the lease.

     So, in the future, follow the rules of the lease term agreements to the letter.  No matter how sorry you feel for the renter.  You may be bosom buddies longer than you wanted.

When you, as a landlord, have people interested in a unit, you’re maybe seeing dollar signs in rent.  Maybe you’re thinking of increasing the rent every few months.  Or maybe you have a problem tenant who is after you to continually reduce the rent.  Guess what?  There is something to protect each of you.  It’s called a “Lease”. 

     Neither party should be wary of a lease.  It helps lay the ground rules for tenant, owner, who is responsible for what, when and where.  There are different types of leases: a one year lease may provide for a lower rent (a rent discount or concession) for the first month or months to induce a rental. A yearly lease may provide for higher rent with an automatic annual renewal or a roll over to month to month tenancy. A multi-year lease may provide for a rent increase at the start of each new lease year.

     There are many areas which the lease can cover for both the tenant and landlord.  For example, when leases provide for periodic changes to the rent, are clarity and notice.  If the rent change is based on something other than a dollar amount (e.g., the monthly rent shall increase to market rent), then the terminology (market rent) must be clearly defined.  A lease providing for an initially lower rent should clearly state if it is a one time or continuing concession, if the total concession amount is applicable to the initial month(s) or spread over the entire lease, and if it is recoverable if the lease is breached.  The resident may be unwilling to renew the lease. If a lease term expires and the resident remains in possession and continues to pay rent that is accepted by the landlord, then a month to month tenancy is established at the old lease rent amount.

     For more information and help in drafting a lease, please see an appropriate attorney.