Question for experienced landlords regarding lease

[Dude]

Hi all,
I've got a small 800 sq.ft. 2 bed/1 bath home in a nice neighorhood (one block away from my residence) in Saint Petersburg, Florida that I want to rent out.  I think I have a good renter lined up, now I just need to come up with a residential lease.  I am a first time landlord.

Any opinions on how I should draw up a bullet-proof residential lease to protect myself?  In this day and age of lawsuit happy people, is it worth hiring an attorney to do it for me?  Or, is there a good software program that I could buy that would help me do it myself?  Seems like leases can be pretty complicated these days, including "mold addendums", disclosures on lead-based paint hazards, etc.  I just want to make sure my rear end is covered if you know what I mean!  Thanks in advance for any advice you could share.

 

[Rich_by_the_Bay]

I've got a small 800 sq.ft. 2 bed/1 bath home in a nice neighorhood (one block away from my residence) in Saint Petersburg, Florida that I want to rent out. I think I have a good renter lined up, now I just need to come up with a residential lease. I am a first time landlord.

Any opinions on how I should draw up a bullet-proof residential lease to protect myself? In this day and age of lawsuit happy people, is it worth hiring an attorney to do it for me? Or, is there a good software program that I could buy that would help me do it myself?

Have you thought about a management company? They will take their cut, but would handle leases, collections, arranging repairs, showing the unit, etc. As a fellow Tampa Bay denizen married to a realtor, I can tell you that do-it-yourself leases are a risky deal.

Just a thought.

 

[Dude]

Have you thought about a management company? They will take their cut, but would handle leases, collections, arranging repairs, showing the unit, etc. As a fellow Tampa Bay denizen married to a realtor, I can tell you that do-it-yourself leases are a risky deal.

Just a thought.

Yes, I've thought about it.....my sister also rents out a house in St. Pete and uses Tourtelot Brothers management company.....the rent is $1450/month of which they get 10% every month, and they charged her about $1100.00 leasing fee.....it works for her since she now lives on the other coast (Ormond Beach).....but like I said I live one block away from my rental so I can keep a close eye on it, plus I think I can get $975/month so I'd rather not pay $97.50/month to a management company because I'd rather invest that chunk of change so I can retire early, also I need every dollar I can get to pay property insurance which ain't getting any cheaper!  Actually, we bought this house with the intention of renting it out until the mortgage is paid off, then we plan on tearing it down and building our family home there.....so that extra $97.50 towards principal each month will get us there quicker.....this was the least expensive home in our neighborhood (where we want to be) and we still paid $185k for it!  Land is like gold in Pinellas county, especially near the water/beaches!

An attorney drew up my sister's lease for Tourtelot Bros.....I think I probably go that route also.  Thanks.

 

[AltaRed]

Am surprised your local Real Estate Board doesn't have a standard leasing agreement you could use. Needs to meet state laws where you are located. The standard form is what I did when leasing (as a tenant) here in Texas and they are landlord friendly here (the big R thing).

 

[Rich_by_the_Bay]

Yup, sounds like managing it yourself with an attorney's lease will work well for you.

Let us know how it goes - I am sure you know this will not be a "passive" investment!

 

[poboy]

I get a standard lease from office depot.  Space allows me  to write in terms, ie,rent amount, rent due date, late fee of x if  not paid by the _ day of the month, deposit of x, late
charge of x in case a check is returned.  Yard maintainence to do done by tenant, insurance does not cover contents, premises to be occupied by (jeb bush and janet reno),to ensure 38 people do not end up living there) and just about anything else . oh yes, 2 keys. Repairs will be made by landlord. ( Flushing a towel down the toilet type problems is the responsibility of  tenant.)  I have owned a rental  house since 82 and have found if you spell it out on the level of a third grader if helps avoid disputes.  I also have an alternate phone number for tenant to call if I am away.
Oh well, too much rambling. I have been fortunate over the years and do require an application form for people to fill out prior to renting.

 

[Craig]

AltaRed and poboy are right ... don't draft your own, or have an attorney draft a lease. Standard forms are easy to find, and they've proven themselves over many years.

Biggest thing ... run a credit report, and call former landlords. You are interviewing someone for a job ... they are your caretaker, and also pay you a little something for living there. With today's economy, residential rents are unrealistically low relative to "values". Thus, the damage they can do to your property exceeds the upside of the rent. I can't stress this enough.

We've had residential rentals for about a decade, and my wife has done a great job in selecting and managing tenants. Knock on wood, but we've never had a significant problem ... and we live in TN, but rent properties in AZ and OR.

DW is gentle with one couple in OR, who are occasionally a bit late with the rent (always pay), but also do a lot of the minor maintenance themselves. She gives them Christmas / holiday gifts, keeps the rent increases reasonable (for both sides), and when / if they hit a bump, we work with them. They are our customers, we value them, and they know it.

But mostly, we try to ensure we have a solid legal doc / lease, solid credit reports, good feedback from former landlords, good character, and a good relationship so that they are less inclined to become the nightmare tenant.

Best of luck.

 

[Maximillion]

http:www.vrbo.com

This site allows you to deal directly with renters and you might make as much money just renting to thse who only visit a month at a time??

 

[Maximillion]

http://www.vrbo.com

 

[tryan]

Lease requirements can vary from state to state. MA is very strict about lead paint disclosures and late fee implementation.

If your sister hired a FL attorney to get hers done ... have her fax it and use it as a boiler plate. No need to rehire an attorney (they'll just pass a similar boiler plate for a fee).

Hope this helps.

 

[LRAO]

If you're going to do it yourself, be sure to use tenantalert.com

Good luck.

 

[Martha]

The lead paint disclosure requirements are a matter of federal law and apply everywhere. http://epa.gov/lead/pubs/leadbase.htm

State laws on everything else vary tremendously.

 

[Dude]

If you're going to do it yourself, be sure to use tenantalert.com

Good luck.

Boy, there's alot of great information and advice in this thread, thanks everyone, this is definatley a keeper.

LRAO - you answered my next question which was "how do I run a credit/background check on a prospect renter?"

I assume you have used the tenantalert.com service?  They offer alot of packages, e.g. Basic $9.95, Extra $12.95, Eviction $15.95, Complete $19.95, ValuePackage $29.95.  Which package do you order when checking someone out?

 

[yelnad]

References from past landlords haven't always worked for us in the past. The most current landlord will usually lie in order to get a deadbeat tenant out of their own property. Call landlord references farther back if you can.

 

[Arif]

Here is where I get my leases from and never had a problem in court (only been once in 8 years): http://www.ilrg.com/forms/lease-res/us/fl

Make sure you run that background check and get a security deposit. This message board will help you out as well with the day to day battles issues with managing properties: www.mrlandlord.com

 

[mathjak107]

i would always get last months rent and security deposit or else you end up holding nothing at the end..heres a little tid bit..i would ask 25.00 more than i actually wanted with a 25.00 rebate if im paid by the 5th of the month..i would actually hand them back 25.00 so they felt like they were getting a bonus and it kept them on time.....

 

[nun]

Just go to Staples or your local office supply place. They'll have rental
leases you can fill out. That's what I did when I wanted to rent out an
apartment.

Best advice I can give you is to interview tenants so you can get a gut feeling
about them and ask for a couple of references, one from their work so
you can see that they are financially ok. Then get first and last month's rent
and maybe even a deposit.

 

[oldcrowcall]

What do you want to protect yourself against? Good leases are important but make sure you have adequate insurance (make sure your insurance agent knows what you are doing). You could also consider putting the rental house in a separte entity if you want to go that far, esp. if you have a lot of assets in your name.

 

[Dude]

You could also consider putting the rental house in a separte entity if you want to go that far, esp. if you have a lot of assets in your name.

Are you referring to a "Land Trust" arrangement?

 

[lazygood4nothinbum]

on a related topic florida legislature is working to strengthen lease agreements in favor of landlords, allowing 2 months of early termination fees even if the place is re-rented right away, effectively collecting rent twice on the same apartment.
as an investor i'd be for it. as a bleeding heart liberal it pisses me off. my bleeding heart is torn.

 

[tryan]

Anybody with first, last and security has bought a house already.

Just get a security deposit and first month rent and make sure they have 3x rent coming in every month.

 

[mathjak107]

Anybody with first, last and security has bought a house already.

Just get a security deposit and first month rent and make sure they have 3x rent coming in every month. 

 

[mathjak107]

ist month and security is not enough in my experience...if they hold you up and dont pay last months rent you got nothing...you cant even start an eviction process for non payment of the last month ,at least here in nyc...it took me months to get my tenant out....when they moved in 3x rent was no problem but divorce and layoffs have a way of shifting things...in my opinion you can never hold to much in reserve....

 

[seaview]

Rented my house 4 times. Two times an excellent experience and two times a night mire. Took 6 months to get last "person" out and he was a policeman.

 

[tryan]

in my opinion you can never hold to much in reserve....

I hear ya ... But I would have turned too many good people away if I held out for first, last and security.  Heck, I've got one tenant 9+ years who had first + $100 and built the security up at $100/mo.

Every eviction I've done happened when the tenant fell out of the 3x rent criteria (job loss, seperation/divorce, blah, blah, blah ...).  An eviction in MA will set you back 3 months if you act as soon as possible;  any longer, it's my fault (for being too trusting/forgiving).