Hi, I recently found a gentlemen who is flipping his home in Murray Hill, in Jacksonville, and I've been in discussions to purchase the property from him when the renovation is complete. The garage behind the property was renovated into a 1 bedroom unit, equipped with a kitchen, bathroom, living room, etc, about 15 years ago, and he's been renting it out ever since. This brings up several questions & concerns.
1. Do I need a rental/landlord license of any kind in order to rent out the main house or the small 1 bedroom apartment in the back? I've never lived in Murray Hill and was unsure.
2. No permit was ever pulled when he was building/renovating the 1 bedroom unit in the back. What kind of implications does this have?
3. Can the square footage of the 1 bedroom unit be added to the total square footage of the property during the appraisal? If not, would I ever be able to do anything in order to sell the property counting that square footage? Would the fact that no permits were ever pulled have any impact on the appraisal?
We had a similar situation in Orange park. There was added sq footage on top of what use to be carports and a patio that wasnt permitted. We later added duct work and there was no question on permitting as we rehabbed the inside as well. We took it from 864 sq ft to 1402...It didn't effect the appraisal negatively it added to value. But that was Clay county not Duval.
@Kurt Stein When you have a professional inspector review the property, you can see how well the unpermitted work was done. You can always get a quote from a licensed contractor to fix/repair any issues, they can pull a "repairs" permit for some of the items, and this also allows for the cost to be rather low for the permit.
See if you can get a quote for insurance on the property as well. See what the insurance person, sometimes they send an adjuster to review the property, says about the space. I'd want to make sure that the city knows that the space is heated and that you can get insurance for all heated space. You don't want to buy a property that cannot be insured.
You do not need any rental/landlord license if you own and rent out the house, yourself. Its a great area and your unit should get rented soon. You really will not know about the space until you get the inspection done. Everything can be fixed for a cost.
@Jack Bobeck you don’t need license to be landlord. If you looking to update the back for added square footage I would visit an architect to redo the plans or asked the city can they grandfathered the additional square footage.
@Kurt Stein I would not waste the money on an architect, drawings, plans, that will add up quick. I know I've used them for properties. Besides, you don't know if you are going to buy the property. See if the work was done right, before you go through the time and money to change the sq ft of the property.
@Jack Bobeck you do not need a license to be a landlord. You need a license to be a property manager. The most you can get is business occupational license (if you want to be technical) but that is it. Many investors are leasing their duplexes, homes, rooms etc. they do not have license. If you are a property manager your required by the State of Florida to have a license.
Thanks @Joel F. , I posted what you needed a license for in the state of Florida, so that others would get a benefit of learning what licensing is needed to operate in Real Estate in Florida, since there are many investors looking to get into turnkey properties, and many who may not know the Florida laws. Thanks.
@Kurt Stein you do not need a license to rent out the unit.
Not having a permit for the renovations could potentially be problematic when you try to get it insured and if you get a really terrible tenant who is trying to avoid eviction they could say they're withholding rent because you're not in compliance with city code. If they issued a letter of withholding you'd be up a creek.
I would recommend that if the renovations look decent enough that it's not a huge cost to bring it up to code you get a drawing done and apply with the city to have it added to the square footage. Keep in mind while this may help your appraisal it may also raise your taxes.
@Kurt Stein My taxes for my Murray Hill Properties rose $20 per property between 2016 and 2017. The appreciation that Murray Hill saw during the same period was 10%. Don't let the taxes stand in the way of bringing the property up to code.
Most good Realtors will present all the facts to buyers and if permits are accessible in COJ so anyone can see if a permit was pulled for any part of the property. If I were buying a property that was not permitted, I would ask the seller to come off the price by half for all the possible repairs needed to bring the property compliant.
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