Renting out a condo in Florida can be very lucrative, especially in high-demand areas. There are some key considerations to keep in mind, though, as becoming a landlord isn’t as easy as simply listing a property online and collecting checks. If you want to be a successful landlord in Florida, it is important to cover all your bases.
What You Should Know About Renting Out a Condo in Florida
Florida has a booming rental market, with more and more people moving to the Sunshine State. While the state attracts new residents, it is equally inviting to tourists and visitors. This comes as no surprise considering the many qualities that make Florida great.
As more people seek accommodations in the state, long-term or otherwise, more condo owners are choosing to make a profit on their investments. Renting out your Florida condo, though, isn’t as simple as it might initially seem. There are some crucial steps that you must take and several considerations to ponder.
To help you get started on your landlord journey, here are the best tips for running a rental property in Florida.
1. Familiarize Yourself With Condo Association Rules
Before buying a condo in Florida and renting it out, it’s imperative to first check the condo association’s rules. Florida amended its Condominium Act to limit rental prohibitions in condo associations under Section 718.110(13). However, rental restrictions can still apply.
As a unit owner, it’s important to check your condo association’s governing documents to confirm whether renting out your unit is even allowed. Many associations also have rules that only allow long-term rentals, which run for at least 30 days. Others cap the number of rentals permissible within the condo community. Furthermore, owners may need to complete certain forms before renting out their units.
Apart from that, most associations require tenants to follow the rules of the community as well. If your tenant violates a rule, you might be on the hook for any penalties. Plus, if your association has pet rules, parking restrictions, visitor limits, and other similar rules, they usually apply to tenants.
If you have yet to buy a condo unit, review the association’s governing documents before closing the deal. This way, you can check whether or not the association’s rules are a good fit for what you intend to do with your unit.
2. Understand the Landlord-Tenant Laws
As a landlord, you should understand Florida’s Landlord-Tenant laws. These laws cover the obligations and duties of the landlord as well as the rights of tenants. Remember that landlords are responsible for maintaining a habitable home for their tenants. The same laws govern security deposits, eviction proceedings, rent, and lease requirements.
For instance, landlords generally must return the security deposit within 15 days of terminating the lease. Landlords must also provide an itemized list of deductions from the deposit, if any. If you wish to evict your tenant, you must do so in accordance with the law. Evictions can be tricky, so it’s best to consult a legal professional.
3. Secure Licenses and Permits
In Florida, operating a vacation rental requires a condo license. You can apply for this license through the Florida Department of Business and Professional Regulation. Depending on where your rental is, you may need additional permits from the local government, too. More often than not, you must renew your license every year and pay a few hundred dollars to maintain it.
4. Keep Your Condo Appealing
Renting out a condo in Florida can be tough when you have a lot of competition. Since the demand is high, more people are trying to compensate for the supply. If you want to secure tenants, it’s essential to make your condo appealing.
Cleanliness is of utmost importance when maintaining your condo rental. Hire a professional cleaner to spruce up your unit after every stay and before the next tenant. Make sure you have a nicely decorated unit, too. Most people won’t go for a rental with only the bare minimum necessities. Install appliances such as an AC unit and a refrigerator.
Safety is also paramount. Protect your tenants by installing smoke alarms, carbon monoxide detectors, and security measures. When tenants feel safe in your unit, they’re more likely to recommend it to others (for short-term stays) or to renew their lease (for long-term stays).
5. Learn How to Market Your Listing
If you want to get your condo rented in Florida, you have to learn how to market it properly. Advertise your rental unit by posting a listing online. List down all the attractive features of your condo, including basic information such as the number of beds and baths. You should also supplement your listing with nicely taken photos of the unit.
Marketing your listing online is a great strategy to get the word out. Depending on the website you use, you should expect to pay anywhere from $0 to $30 for this service.
6. Know How Much to Charge in Rent
One of the most common mistakes new landlords can make is arbitrarily setting a rental price. You don’t want to risk pricing your rental too low, as you won’t make a profit. On the other hand, if you charge a rent that’s too high, you might have a hard time attracting tenants.
To determine your optimal rent price, you must consider a few things. First, check whether or not there are rent control laws in your area. Some places have laws that limit the amount of rent you can charge.
Second, do your research on the local market. Check the prices of similar rental units in your area. This will give you a good idea of how much you should charge to remain competitive. Of course, if your condo or building has nicer features, you can usually charge a higher rental price.
Finally, make sure to account for your expenses. Your objective is to make a profit, so if your rent barely covers your costs, you’re just wasting your time and resources. It’s imperative to account for HOA fees, property taxes, insurance premiums, management fees, maintenance fees, legal fees, and other costs.
7. Have a Lease Agreement
A lease or rental agreement protects the interests of both the landlord and the tenant. It is essential to have a written agreement covering the terms and conditions of the rental. This agreement should include all pertinent information, such as security deposits, rent, timelines, maintenance obligations, rules, and penalties.
Additionally, your lease or rental agreement should include a repair clause, an eviction clause, and an early termination clause. The repair clause states that the tenant is responsible for all repairs and maintenance. The eviction clause outlines the probable causes for eviction, while the early termination clause allows parties to end the agreement before expiry under specific conditions.
Most landlords lack the proper background to prepare a contract such as this. Therefore, it’s best to hire a legal professional to draft and review the agreement. This ensures that it covers everything and remains in compliance with the law.
8. Get Insured
As a Florida landlord, insurance is your first line of defense. If you want to operate a condo rental, make sure you have proper condo insurance. This applies even if your condo association already has a master policy. Additionally, it would be best if you also took out a good landlord insurance policy. Landlord insurance can cover liability, disasters, and broken or missing items.
Insurance costs can vary depending on your provider, the type of rental you run, and the coverage. On average, landlord insurance costs $2,860 per year in Florida, and condo insurance costs $1,400 per year. Shop around before settling on a carrier so you can compare your options.
9. Know Your Tax Obligations
Renting out a condo in Florida involves understanding your tax obligations. As a condo unit owner, you must pay property tax to your local government. Since you’re operating a business, you must also pay and file rental income taxes. Taxes aren’t fixed for everyone, as they can depend on your property value and revenue. Having a tax professional by your side can help immensely.
10. Screen Your Tenants
It’s not enough to find tenants to rent your condo unit; you must also screen them. If you want high-quality tenants, you must undergo a tenant screening process, especially for long-term rentals. This process involves background checks, rental history verifications, reference checks, and credit history checks.
Outsourcing this job is a good idea, as service providers usually have more resources. Generally, you should expect to pay between $25 to $75 for tenant screening reports.
11. Setup a Rent Collection System
Rent is the lifeblood of your rental unit, so ensuring you have a system in place for collection is crucial. You should iron out the details of your rent collection methods and rules. Make sure your tenant understands rent due dates and grace periods. You can collect rent through checks, direct deposits, online transfers, ACH payments, payment apps, and credit/debit cards.
12. Conduct Property Inspections
Renting out a condo in Florida can be difficult if you don’t maintain your unit. As such, you must conduct regular property inspections. Inspect your unit before the tenant moves in and after they move out. Your lease or rental agreement should also detail annual inspections for possible maintenance and repairs.
Performing regular inspections will help you keep your condo rental in tip-top shape. They also allow you to make prompt repairs, minimizing further damage, which can sometimes be irreversible.
13. Come Up With a Maintenance Schedule
Inspections let you identify potential problems before they worsen. However, you must follow through with regular maintenance to ensure all components continue to function smoothly.
Your maintenance schedule should reflect all the items you must check and the frequency at which you must check them. For instance, scheduling pest control services twice a year is a good idea. You should also have your HVAC system services at least once annually.
Here are other examples:
- Test your smoke alarms, carbon monoxide detectors, and other safety devices monthly. Replace the batteries annually.
- Inspect walls and ceilings for cracks every year.
- Hire electricians and plumbers to check the electric and plumbing systems once a year.
14. Maintain a Good Relationship With Your Tenant
If you want a high tenant retention rate and a low turnover rate, you should try to build good relationships with your tenants. Maintain a friendly yet professional demeanor when interacting with them. Address their concerns in a timely manner. A good tenant relationship can help you earn glowing reviews and attract more renters for short-term stays.
15. Hire a Property Management Company
As this list clearly shows, a lot goes into running a condo rental. Most landlords only see the potential profit they can earn and overlook the amount of work involved. If you don’t have the expertise for it or other priorities, it’s best to hire a professional property manager for the job.
Property management companies can help you advertise your rental, set a fair rental rate, screen tenants, prepare lease/rental agreements, collect rent, conduct property inspections and maintenance, and facilitate tenant communication. Property managers are also usually well-versed in the laws that affect rental properties.
Becoming a Landlord
While renting out a condo in Florida requires a lot of time, dedication, and effort, it certainly pays off in the end. The rental market in Florida is flourishing, and more condo owners are becoming landlords. If you choose to take the same path, you can make your job infinitely easier with the help of a property management company.
Florida Property Management is an online directory that allows you to look for reliable property management services in the Sunshine State. Start browsing today!
RELATED ARTICLES: