How to Minimize Risk When Leasing Investment Property to Renters

Successful real estate investors know that to protect your investment, you not only need to have the proper insurance for your property, but you also need to take some extra steps to manage risk when leasing investment property to tenants.

Choose tenants carefully.

The best way to avoid potential issues with tenants is to do your due diligence during the tenant selection process. Be sure you get a credit report on potential renters to see if there is any history of eviction for nonpayment or property damage. You may also want to check references from previous landlords.

Inspect the property.

You should personally inspect your property periodically, even if you have a management company in place. In Florida, you must give residential tenants at least 12 hours’ notice that you wish to inspect the property.

Perform regular maintenance.

If you own more than one investment property, it may be difficult to remember when was the last time you had the air conditioning serviced or the furnace inspected. Keep a master maintenance schedule for each property and be sure to check that the fire detectors are working properly and there are fire extinguishers available for each unit.

Communicate with tenants on safety issues.

Be sure that your tenants are aware of your policies on safety and security when they occupy your property. You should communicate this in the lease agreement as well as in a move-in letter.

Require tenants to notify you of needed repairs or alterations in writing.

In your lease agreement, require tenants to notify you in writing of any necessary repairs or alterations on the property. Never let a tenant try to do potentially dangerous repairs, like fixing electrical equipment or plumbing.

Use legal lease agreements.

Be sure your lease agreements are up to date with current state and federal laws. Work with a Florida real estate attorney to craft a lease that works best for your property and complies with state law.

Know Florida tenant laws.

Florida has laws that protect tenants and require landlords to provide certain notifications and take specific actions if they wish to terminate a lease. Knowing Florida tenant laws can save you from costly litigation.