At Gibson Group Management, we provide professional leasing and management services in Fort Lauderdale and throughout South Florida. We see a lot of landlords make some common mistakes when they manage their own properties. We’ve decided to share a two-part video on the top 10 mistakes that landlords tend to make.
Today, we’re picking up where we left off in the last blog, and we’re talking about five more mistakes that we see landlords make.
Mistake No. 6: Lack of Property Insurance
Sometimes, landlords think that they don’t need insurance because they don’t have a mortgage. This is not true. You have to protect yourself against liability. If a tenant slips and falls or something happens at the property, you’re going to be responsible. Lawsuits are expensive, and you need proper insurance. At Gibson Group Management, we are fully insured. We carry all the required coverage to protect us and our clients and tenants.
Mistake No. 7: Illegal Eviction Measures
Sometimes, a landlord may disconnect the utilities or refuse entry when a tenant is not paying rent. You might get upset because the tenant hasn’t paid in several months, so you disconnect the water or change the locks. That’s a lawsuit that’s sure to happen, and it’s one you’re going to lose.
The proper way to evict a tenant is through the legal proceedings in the court system. You can get control of your property back when you follow proper eviction procedures.
Mistake No. 8: Using the Security Deposit as Rent
If a tenant can’t pay rent one month and you agree to use the security deposit to cover that month, you’re going to run into trouble. The security deposit will never get replenished, and you won’t be able to process it properly. When your tenant moves out, you have to process the security deposit according to the law. You can’t simply not process it because you used it for rent.
Without the security deposit, you won’t be able to make repairs after the tenant moves out. Don’t use the security deposit when rent is owed during the lease term.
Mistake No. 9: Improperly Mailing the Security Deposit
We have talked about this in the past, and you can find my prior video on this topic. Florida law is very specific in the way the security deposit is returned. You have to send it via certified mail. You can’t use the regular mail or FedEx. If you’re making a claim against the deposit, there’s certain verbiage you have to use in your deposit letter. Not saying the right things can result in you having to give all the money back to the tenant, even if there’s damage to be paid for.
Mistake No. 10: Collecting Last Month’s Rent
Sometimes, landlords will ask for first month’s rent, last month’s rent, and a security deposit before a tenant moves in. If a tenant pays that but then also pays the last month’s rent when it’s due, you’re left with an extra month of rent which you need to return to the tenant, even if they have left your home in shambles. You can’t use that money for repairs, it has to go back to the tenant. You can only use the security deposit to pay for damage left behind by the tenant. It’s shocking for landlords to have to return money that they’d rather use to repair the home and get it ready for the rental market.
We have a policy of not collecting the last month’s rent before move-in. We ask for the first month’s rent and a security deposit. If we think the tenant might be risky, we’ll ask for a larger security deposit.
As you can see, it’s easy and common to make mistakes when you’re managing your own property. If you have any questions about Fort Lauderdale property management or you need help with leasing and tenants, please contact us at Gibson Group Management.