Royalty Rentals & Property Management

 

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What to Expect When Renting Your Property  

Introduction

 Congratulations on deciding to rent your house or Condominium.  There are many benefits to using Royalty Rentals to list your property for rent and having your property professionally managed.  

Listing & Renting your Property:

·        A Comparative Market Analysis is essential in setting the correct rental price.  By comparing similar properties listed or rented in the same approximate area as your home gives you an accurate rental price.

·        Potential tenant applications are carefully screened by doing a credit check, a national criminal check, previous rental history, and employment.

·        Royalty Rentals uses an Attorney to prepare all leases.

·        A move-in inspection is conducted with the tenant and any previous damage is noted.

·        There are specific Tenant/Landlord responsibilities and rights under Florida Statutes 83.51, 83.52 and 83.53 that you, the owner, may not be aware of.  You could be breaking the law without realizing it.

Property Management of your Property:

·        Peace of mind is very important.

·         We offer 24 hour emergency service.

·        We use only licensed and insured contractors for our repairs.

·        We offer inside inspections every two months.

·        We collect the monthly rent.

·        If there is a problem with a tenant we use the proper legal forms required.  

PART ONE

 

A.

Preparing your rental property to be rented:

·        Check all of the plumbing fixtures for leaks.

·        Test all of the smoke alarms.  Replace batteries.

·        Clean the air conditioner filters or replace any worn filters.

·        Make sure all of the windows work properly and they all have screens.

·        Test all of the appliances to make sure they work properly.

·        Have the carpeting professionally cleaned.

·        You do not have to deep clean the property until it is rented but make sure it is presentable.

·        Keep the lawn mowed and the landscaping weeded and trimmed.

·        Repair any tears in the lanai screening.

·        Remove all personal items.

·        Clean the lanai area and if needed pressure wash the floor.

·        Clean the gutters.

·        Pest Control.

·        If your property is in a gated community with a homeowner’s association you need to provide your agent with the number and name of the contact person.  It is important for your agent to find out if there are rental restrictions, what the application process is, and what, if any, utilities are included with your maintenance fees. Obtain a copy of the Homeowners Association rules and regulations.

 

B.

Decisions to be made before listing the property.

Are you willing to accept Section 8 tenants? (Housing Assistance).  The benefit of accepting Section 8 is the guarantee of a large portion of the rent being paid on time.  There are rare occasions when the government runs out of money or the tenant no longer qualifies.  Your property needs to be inspected and approved for occupancy by the Housing Authority.

Are you willing to accept pets?  How many? What type, etc?  If you do accept pets we recommend requiring an additional $250.00 refundable pet deposit per   pet.  We also ask to see and meet the pet before the lease is signed.  You don’t want an aggressive or uncontrollable animal on your property.  The tenant also has to sign a pet addendum.

Will you provide pest control?  Florida law requires the property owner of any property larger than a duplex to pay for pest control.  We suggest that all of owners provide pest control every 3 months. If you leave it up to the tenant it can cause problems if they do not maintain the pest control.  Remember, this is Florida and unfortunately we have a large population of insects. 

Who will be responsible for lawn care? Most single family home rentals require the tenant to take care of lawn and landscaping.  Some owners prefer including lawn care in the rent.  It is a personal choice.

If your property has a pool, you need to decide who will have the responsibility of maintaining it?  This is more of a personal choice.  Some owner’s prefer to include it in the rent and adjust the rental amount higher to compensate.  Some start out including it and sometimes a potential tenant uses it as a negotiation point in lowering the rent.

Are you willing to sign a “Specific Power of Attorney”?  The power of attorney gives us the authority to sign the lease on your behalf. This eliminates any delays on finalizing the rental. 

All of these questions need to be answered before doing the listing contract.  

C.

The Listing Contract

Once the property is in rentable condition it is time to do a listing contract.  The contract is for a minimum of six months (though it very rarely takes that long to find a tenant) and sets all the terms for renting your property. At the time of the listing we require the following:

1.     A sign W-9 form for everyone listed on the title of the property.

2.     Property owner must notify his insurance company that property is being used a rental and must carry public liability insurance on the property at all times in an amount not less than $100,000 per person and $300,000 per occurrence and must furnish Royalty Rentals with proof of insurance and a copy of the declaration page.

3.     Signed “Specific Power of Attorney”.

Typically we set the rental price at the higher end of the comparative market analysis.  If the property does not rent quickly and there are few showings, be prepared to lower the price $25.00 after two or three weeks.  Sometimes you have to lower the price several times before the property rents.  

D.

Marketing the property

The most valuable tool in marketing your rental is the Multiple Listing Service through our local Real Estate Board.  It reaches hundreds of other Realtors who may have clients looking for a home to rent.  The multiple listing services also feeds into the national website Realtor.com which reaches thousands of people across the country.  The listing includes photos of your property and a description of the home. It is also listed on the Royalty Rentals Website. We rarely place newsprint ads because they are not cost effective.

E.

Finding a tenant

The first step in finding a tenant is the application process.  We check the potential tenant’s credit history, the national criminal database for any criminal history, eviction history, contact current and previous landlords (if the current is less than 2 years), employment and references. 

In the current economic situation foreclosures have become very common.  If you base your decision on just the credit score, bankruptcy and foreclosures you are ruling out a large number of potential tenants.  Many good people lost their homes to foreclosure and filed bankruptcy during the past several years.  It is important to look at what is being paid on time and what isn’t.  For example, many people cannot afford health insurance and illness can run up medical bills very quickly. Very often medical bills show up in collections as people with limited income pay living expenses first. Are there a number of outstanding medical bills but car payments, loans payments and rent are being paid on time?  Has there been a recent divorce? Often the credit rating of one/or both have suffered.  Asking for an explanation of credit problems can make a difference.

If you decide to accept them as tenants you have the option of collecting the last month’s rent as well as first and security.

 

F.

The lease   

We have our Real Estate Attorney draw up all of our leases. A typical lease is for a one year period, though on occasion we have done two year leases.  Each lease states the due date of the rent.  There is a five day grace period before late fees begin to accrue.  The late fees go to Royalty Rentals to cover the additional work and forms required to collect the past due rent. The standard fee we charge is $35.00 for the first day after the grace period and an additional $2.50 per day until the rent is paid in full.

 

G.

Move-in

If the property has been vacant for any length of time, it should be thoroughly cleaned prior to the tenant’s move-in.  This includes windows (inside and out), appliances, flooring, all surfaces and air conditioning vents (including cleaning or replacement of the filter). Smoke alarm batteries should be replaced. When the property is rented and just before the move-in, Royalty Rentals does a move-in inspection.  Any existing damage to the property is noted and pictures taken.  The same form is used at the time of move-out.  The inspection protects both the tenant and the owner.

 

H.

The commission

Royalty Rentals retains the first month’s rent as a commission.  Out of this we also offer Realtors from other real estate firms a commission.

 

If we have only the Rental Listing Contract and you are not planning on having the property professionally managed, our responsibility ends at move-in.  We will deduct our commission; give you the security deposit and a copy of all of the documents.

 

I.

Security Deposits

Security deposits must be held in a separate escrow account in a Florida bank.  We strongly recommend that Royalty Rentals holds the security deposits.  If in the event a tenant needs to be evicted, our attorney will not handle the eviction unless we hold the deposit. If you choose to hold the security deposit you must sign a waiver of responsibility.

 

PART TWO

 A.

The Property Management Contract

We strongly recommend that the Property Management begin at the same time as the listing contract.  Any problems or work needing to be performed before a tenant is placed would be covered under the Property Management Contract.  If the property is not under contract, Royalty Rentals would not have legal authorization to supervise any necessary work.  In addition, a property inspection would be done on a weekly basis until occupied by a tenant. All property management contracts are for a minimum of one year. Property management cost is 10% of the gross monthly rent. The property management fee is deducted each month from the rent once the property is occupied. Property management includes collection of the rent, handling all repairs, alternating monthly outside and inside inspections (weekly while vacant), and monthly statements.

 

B.

Processing Rental Payments

The lease gives the tenant a 5 day grace period before late fees are assessed on the rent.  Leases begin on the first day of the month.  For tenants who wish to move in at any other time of the month, the rent will be pro-rated. Collected rent payments will be deposited no later than the 6th day of the month.  Net rent checks will be issued by the 10th of the month.  We offer free deposit of net rent checks if your bank has a branch in the Fort Myers/Cape Coral area. We do not offer direct deposit at this time.  All other net rent checks will be mailed.  If the rent payment is not received by the 5th of the month we will take the following steps:

·        Call the tenant to find out why payment has not been received.

·        If we are unable to reach the tenant by phone we will send a late rent notice by mail or email(if we have an email address for them)

·        If we still do not receive payment we will issue a “3 day notice to pay rent or quit the property” form.

·        If we still do not receive payment it will be time to start the eviction process.  If we are holding the security deposit in our escrow account our attorney will handle the eviction process.  It normally takes 30 to 45 days to complete an eviction. The cost of the eviction is deducted from the tenant’s security deposit and the balance is dispersed to you.

 

C.

When a Tenant Breaks the Lease

What happens when a tenant leaves before the lease ends?  It clearly states in the lease the tenant signed that if they move out before the end of the lease the security deposit is forfeited to the owner.  The first step in releasing the security deposit is sending the tenant an “Intent to Impose Claim on Security Deposit” form by certified mail with a return receipt. If the tenant has not given forwarding address the form is sent to the rental property address.  Upon receipt of the form the tenant has 15 days to dispute the claim.  The security deposit cannot be released until 15 days after we receive the signed, return receipt or the Post Office returns the undelivered letter to us.  In the lease it states that the tenant will be responsible for the rent until the end of the lease or until it is rented again.  You need to understand that collecting any additional rent or damages above the security deposit is an unrealistic expectation.  It is very expensive to try and collect the additional money and very difficult to track down the tenants.  Royalty Rentals will not attempt to collect the outstanding debt.  If you choose to pursue the matter we will give you all of the necessary documentation we have.

D.

Repairs

Royalty Rentals offers 24 hour emergency service. The tenant contacts us if there is a problem at the property.  We contact you to get authorization for repairs.  If you have email, we send you an “Authorization for Repair” form for you to fill out and return to us. If it is impossible to immediately get the form to you we will accept verbal authorization and will follow-up with the written form. If the problem is an emergency that cannot wait until regular business hours to be repaired, we will immediately send out a repair technician. If we cannot get in touch with you and it is an emergency we will go ahead with the repair. If it is a problem that can wait until normal business hours and we do not hear from you within 8 hours we will proceed with the repair.  We use only licensed and insured contractors for all our repairs.  They send the bill to Royalty Rentals and typically we deduct the amount of the repair from the next rent payment.  Royalty Rental’s does not add any charges to repair invoices.  There are some owner’s who would rather pay the invoice directly, in which case they are obligated to pay the invoice immediately upon receipt.  Confirmation of payment is required to be sent to Royalty Rentals.  If the invoice is not paid before the next rent check is received, it will be deducted from the rent.  It is impractical to “shop” for prices.  Many companies now charge for estimates. We have chosen our contractors based on excellent service, quality work and price. When a major repair or replacement (water heaters, A/C units, etc.) is necessary will get an estimate of the cost before having the work done.  When a major appliance needs to be replaced we will get three prices and schedule delivery and installation.  As payment is required at the time of purchase we will arrange a time you are available to be called so you can make payment using a credit card.  The processing is supervised by us to ensure your credit card number and purchased are secure. Structural repairs, such as replacing roofing or remodeling are not covered under the property management fee. Getting estimates and supervising the work is billed at $35.00 per hour.    

E.

Lease Renewals

If you wish to renew the current lease please notify Royalty Rentals 2 months prior to lease end.  We will do a new Comparative Market Analysis to determine if the current market bears a rent increase. At that time a lease renewal notice will be sent to the tenant asking if they wish to renew for an additional year.

If both parties agree to a renewal a new lease is prepared by our attorney.  The tenant paid for the original lease preparation fee of $50.00.  We request that the owner pay the renewal fee of $35.00.  The lease renewal fee is 50% of the monthly gross rent.  At the time of the renewal signing the $35.00 lease preparation fee and lease renewal fee will be deducted from the current monthly gross rent. 

F.

Processing the Move-Out at the End of the Lease

If the lease is not renewed we make an appointment with the tenant and use the move-in inspection form filled out before the tenant moved in.  A thorough inspection is made.  The tenant is required to leave the property in the same condition it was on move-in, with the exception of normal wear and tear.  With the move-in documents the tenant also received a detailed list of what needs to be cleaned before move-out to receive their security deposit back.  Deductions from the security deposit will be made for any damages or cleaning not done properly.  If the tenant does not agree to the deductions the “Intent to Impose Claim on the Security Deposit” form will be processed.  If there is no damage to the property we have 15 days to return the tenant’s security deposit.  If we intend to file a claim on the deposit we have 30 days in which to do so.  Royalty Rentals will get written quotes on any repairs or cleaning that needs to be done.

 

We encourage our clients to contact us with any questions or concerns regarding their rental property.  Royalty Rentals is constantly striving to offer our client’s the best service.  At Royalty Rentals “We Treat Your Property As If It Were Our Own”.  Please don’t hesitate to contact us for further information:

Joan Medeiros, Managing Director

Office: (239)362-1246, Cell: (239)287-5521, Email: Click Here  

 

 Royalty Rentals, LLC  12995 S. Cleveland Ave.  # 150 Fort Myers, Florida 33907  239.362.1246

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  www.royaltyrentals.com

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