Carlos Cornejo's Blog

The 8 most expensive errors for an investor when renting a property

1.-omission of the local legal system

Many investors and real estate can learn superficially, however, the application of is where make mistakes that end up resulting in loss of time and money. For example, when applied, gives few days and when and as deliver notification of:

  1. Payment or delivery of the unit
  2. Breach of contract with option to correct
  3. Breach of contract with termination of contract
  4. Disturbance to residents

In the same way, before proceeding with any legal process of eviction is must comply with different steps and notifications, which can mean months of delay in the process by which we recommend to have on the team, a lawyer specializing in evictions.

2.-pre-qualification of tenants

Pre-qualify potential tenants is one of the most important processes in this business and many owners overlook it. Despite the negative impact of having empty property, accept a tenant "not pre-qualified" tends to bring higher costs and headaches in the long run. Establishes a system of pre-qualification and stick to that approach. It is important to take into account local regulations "Fair Housing Laws", however, the elements common to prequalification are:

  • Criminal background
  • Credit report
  • References from previous landlords
  • Job reference
  • Personal references
  • Average time living in each property

3.-lack of knowledge of local regulations

Most of the lawsuits against owners results from violations of the legal system that protects potential tenants against discrimination "Fair housing - Fair Housing". Despite this, many owners little attention to these regulations since they use "common sense" to not discriminate and unfortunately "common sense" often violates the regulations laid down in the law. Always take into account that the American system is provided for claims and is very common to see advertising promoting you to contact them if you feel that you have been discriminated against in any way.

These regulations apply not only to the pre-qualification of possible tenant, if not during the relationship landlord/tenant, so it shouldn't be afraid of the system, just to understand it, respect it and comply with it.

Within the regulations, it is prohibited to discriminate based on:

  • Race
  • Color
  • Religion
  • Origin
  • Sex
  • Family status
  • Physical disability

The Local market 4.Desconocimiento

There are different tools and systems that allow to determine, in an estate or specific building:

  • real price of income of specific periods
  • time passing units in the market before rented
  • direct competition
  • demand
  • price per square foot (or square meter)

It is not only amount to know this information at the time of buying the property or when the place for income, if not more importantly is to constantly monitor the market to make decisions at the time.

5.-lack of strategy

As an investor, it is essential to know the behavior of the local market or have a real estate consultant who has this knowledge.

  • Your price strategy be different if you are going to compete with 1 property instead of 10?
  • If the area dominated by families, think it easier to rent a 1 bedroom property or one of 3 rooms?
  • If the area is mainly of Executive singles think it easier to rent a 1 bedroom property or one of 3 rooms?
  • If properties takes 45 days on the market before rent, that strategy you can use to speed up this process?

6.-absence of preventive maintenance
Most of the owners pay attention to property when there is a problem, however, preventive maintenance is often more economical to a replacement which would have had been able to avoid. Depending on the year of property, equipment and conditions in which is is recommended every 2 months a preventive maintenance of appliances, system of air conditioning, plumbing and possible leaks. Additionally it allows you to see the conditions in which the tenant maintains the property and allows you to see if there are people or pets that not authorized in the lease.

7.-lack of good contract

The lease is your first and greater protection. It is very common to see investors who devote a lot of time and effort to the purchase of the property to then try to economize by buying a "template" on the internet that serves them as a 'standard' contract. It is very important to note that the agreement is the main legal protection where it should be very clear terms, rules and regulations that support the agreement between lessor and lessee. It is always advisable to an attorney in this matter that will help to protect your interests.

8.-lack of equipment

An essential part of this business is to create a team of experts in different areas who can help you invest and manage your investment. Each Member must contribute and provide solutions within their field of expertise. The Basic team is composed by:

  • Real estate broker
  • Property administrator
  • Accountant with experience in real estate
  • Eviction Attorney

Carlos Cornejo
Mobile: 7862509463
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Luxur Realty LLC
2786 NW 79th Avenue
Doral, Fl 33178
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