Owning rental property in Celebration, Florida can be lucrative and rewarding. There’s a large pool of tenants and plenty of people are flocking into the area as permanent residents and temporary visitors. There are long lists of excellent reasons to invest in the local real estate market here.
While the benefits and advantages certainly exceed the risks and uncertainties, there’s still a lot of liability that sits with property owners when they rent out a property. The market and the industry has been changing dramatically over the last few years, and if you haven’t been prepared, you’ve probably found yourself struggling.
In today’s blog, we’re looking at three specific and actionable things you can do to limit the liability you’re carrying as a Celebration rental property owner.
Screen Potential Tenants Thoroughly
Tenant selection has more to do with liability and risk than you realize. When you have a well-qualified tenant in place who has great rental references, a solid financial footing, and no criminal record, you are less likely to be chasing down late rent or cleaning up damage after a disastrous tenancy. Tenant screening is not just something you check off the list when you’re leasing a home. It’s an extremely important barrier between you and all the potentially reckless renters out there.
At the very least, you need to run a credit and criminal check when you’re screening tenants. You should also consider these steps to ensure your liability is limited:
- Verify income. Take a look at pay stubs, employment contracts, bank statements, and tax returns. You need to be absolutely certain that the amount your tenant earns will cover your rent every month.
- Check for past evictions. Sometimes they show up on a credit report, but not always. A tenant with an eviction 20 years ago may not be a huge risk, especially if that tenant has demonstrated a stable rental history since then. But, if you come across an applicant who has been evicted twice in the last five years, you’re taking on more risk than you need to.
- Talk to current and former landlords. They can tell you if rent was paid on time and the security deposit was returned. They can confirm whether the pets were well-behaved and the property was cared for.
Work with Licensed Maintenance Professionals
Responding to maintenance requests immediately and completely is a no-brainer. However, you could find yourself with larger problems if you send the wrong person to make a repair. We strongly recommend that you only work with licensed and insured professionals. If you try to save money by sending some guy you hired from Craigslist over to fix a sink, you might not get the sink fixed at all. You might be putting your tenants and your property at risk once this person is allowed inside. And, what if someone who is uninsured falls or gets injured while making a repair at your property? The medical bills will likely fall to you, as well an expensive personal injury lawsuit.
When you’re hiring a vendor or contractor, always ask for:
- Proof of licensure
- Proof of liability insurance
- Proof of workers compensation insurance
Require Renters Insurance
As a property owner, you should be fully insured for everything from structural damage to liability to loss of rent. Make sure your tenants are insured as well. You can require them to provide proof that they have renters insurance. This will protect them and their personal possessions and it will also reduce your liability if something happens at the property. A kitchen fire, for example, that’s due to the tenant leaving a pot on a stove would be covered by the renter’s policy and not yours.
One thing you can do that covers everything here is to work with a professional Celebration property management company. Contact us at Park Avenue Property Management, and we’ll protect your property, your residents, and your investment goals.