Are you a landlord? It’s a good position to be in, whether you’re a commercial landlord or a residential one. You can build equity in real estate and generate cash flow. Who doesn’t like that?
As a landlord, you’ve probably learned a few lessons, and maybe you’ve even learned some of those lessons the hard way. Let me know if you’re familiar with these:
- Use a written lease. Why? A written lease sets down the obligations of each party in writing, eliminating many questions that might otherwise arise. You’ll want a lease that’s customized to your particular circumstances, whether commercial or residential. You’ll also want one that takes relevant statutes and ordinances into account. Now is not the time for a form you find on-line. Find a good attorney to draft one for you.
- Maintain your property. Why? It helps to maximize your property value and allows you to charge more rent. Little things mean a lot: landscaping, mulch, fresh paint. Mulch is cheap and landscaping, particularly if you do it yourself, is not much more expensive. Hire a good painter or make sure you’ve done this before if you’re going to paint it yourself.
- Select the right tenant. Why? The wrong tenant will cost you time and money. The right tenant won’t. Screen prospective tenants with a personal interview and run their names through internet search engines. Ask who their previous landlords were and call them.
- Lock the tenant out or take certain other “self-help” measures if the rent is overdue. Why? This can create liability on your part to the tenant for “constructive eviction.” For example, in a residential tenancy, Florida Statutes section 83.67(1) prohibits a landlord from shutting off or interrupting “any utility service furnished the tenant, including, but not limited to, water, heat, light, electricity, gas, elevator, garbage collection, or refrigeration, whether or not the utility service is under the control of, or payment is made by, the landlord.” Florida Statute section 83.67(2) prohibits a landlord of a residential unit from preventing a tenant’s access to the unit “by any means, including, but not limited to, changing the locks or using any bootlock or similar device.” You could wind up owing the tenant money in the form of damages, attorney fees, and court costs.
- Ignore tenant complaints. Why? If you don’t address them, you may be liable to the tenant. Failing to correct certain problems could be a breach of the lease or a statutory violation. This, too, could wind up making you liable to the tenant for damages, attorney fees, and court costs. You’ll stay on your tenant’s good side by communicating quickly about problems. Some of the problems might be your responsibility and some might be the tenant’s responsibility. If you don’t communicate promptly, the tenant might keep complaining about something that is the tenant’s obligation to repair. Explain this to the tenant professionally and promptly and you can nip a potential problem in the bud.
- Delay in enforcing your rights in the lease. Why? In some cases, if you delay enforcing your rights, you may lose those rights. For example, in a commercial landlord-tenant situation, Florida Statute section 83.202 specifies that a “landlord’s acceptance of the full amount of rent past due, with knowledge of the tenant’s breach of the lease by nonpayment, shall be considered a waiver of the landlord’s right to proceed with an eviction claim for nonpayment of that rent.”
Bottom line: Following these best practices should help you get more out of your landlord experience: more equity, more rent, better tenants, fewer headaches.