Rental Property Deposits
So you are out looking for your new home; you are “apartment hunting”. You are working with a great real estate associate who is showing you exactly what it is that you are looking for and you have a couple of great choices to pick from and are ready to make that much anticipated offer. Yo
Earnest Money (Deposit)
u sit down to sign the offer which your agent has prepared for you and as they explain; you are hit with the harsh reality that you will need to come up with THREE MONTH”S rent to move in. WOW, that is a lot of money for a rental. So why is it that landlord’s require so much money; I mean after all you have great rental history, great credit, your income can easily afford the rent and you have no criminal record. Shouldn’t you be able to move in with just first month’s rent and the security deposit. The reality is that the answer to this question under these circumstances is probably “YES”; you should be able to move in with just first and security, you should be rewarded for having good rental history and good credit. In most instances both landlord and tenant would agree to this arrangement. However there are other scenarios more often than not that dictate differently. I would like to discuss the main issues which would prohibit a landlord from accepted the first month and security alone.
1. Many condo boards require a common area deposit equivalent to one month’s rent, or sometimes a predetermined amount. Therefore if the owner accepts the tenant with first month and security and the condo board gets the security then the owner has no deposit for damages on their property beyond regular wear and tear; the landlord would be exposing themselves to potential loses.
2. Many condo boards have what we refer to as rental restrictions. Sometimes these restrictions can cause issues with deposits. For example; a common restriction is that a unit owner may only rent the unit once per year. Sounds great to most owners especially those that occupy their units as primary residences; “Hey, we wont have that transient atmosphere of people constantly moving in and out”. But now look at it from the point of view of an owner who is renting out their unit. “If I rent this property out to this particular tenant and they stay for only 6 months or for that matter any period of time for less than the 12 month lease; in other words if the tenant breaks the lease I am stuck with an empty apartments with no income”. The landlord still has to pay the mortgage (if any), condo maintenance fees and taxes. Therefore, the owner who has such a restriction enforced by his association will be less likely to lower the move in requirements because they would prefer to guarantee the tenants lease performance for the entire term and this way if the tenant does break the lease the landlord can at least keep two month’s rental equivalent and still have the option to seek damages for the remainder of the lease term.
3. The landlord has simply had a bad experience before and is unwilling to take the risk again. Yes, this may seem unfair, as it seems like future tenants pay for the shortfalls of past tenants but it is the reality and a business decision that the landlord ultimately has to make.
In short, although there may be other reasons for the three months move in requirements these will typically represent the main reasons.
However, I will provide a warning for tenants; watch out for those landlords in foreclosure that are just looking to keep your deposits and collect rent until they get foreclosed. So how do you protect yourself. Well, first of all ask your agent to look up any Lis Pen dens against the property, try to find out if the owner is already in default. Also, if you are looking at a two bedroom with a direct ocean view in a full amenity building and the unit has granite counter, marble throughout and a jacuzzi in the master and the owner is asking only 1300 monthly, it may just be too good to be true. Scroll down to read blog on landlord / tenant laws on foreclosure.
Rental Property Inventory is low…..
At Miami Rent Seekers we specialize in residential real estate in the Aventura, Sunny Isles, North Miami, Hollywood, Hallandale, Bal Harbor, Miami Beach, Brickell and Downtown Miami markets. In recent months we have noticed a significant drop in the inventory levels for available rentals. I believe this may be attributed to several factors which we are noticing in the market.
1. The market is offering excellent rental rates for properties which in the past would have rented for much more.
2. There are many people unfortunately losing their homes to foreclosure, this sector is turning to the the rental market for there housing needs. Increasing the pool of potential tenants
3. Banks are placing REO or Foreclosure properties on the market for sale but not for rent.
4. We are currently in the “snow bird” season; therefore, many owners which have rental properties in buldings which allow short term or vacation rentals will simply take advantage of the increased rental rates for a vacation rental during the season.
In essence all these factors are adding up to a decrease in available inventory.
Our advise is that if you are currently in a rental property and you do not need to move yet, but your lease is expiring, that you simply negotiate a renewal with your current landlord. If you used a real estate agent to locate the unit in the first place, you can simply contact your agent and they will be happy to take care of the negotiations for you. When one of our associates attempts to negotiate a renewal with a landlord on behalf of the tenant they will typically suggest a rate reduction when appropriate due to market conditions; pointing out aspects of the deal like; your “great payment history”, the fact that there will be no down time for rental payments (no waiting for a new tenant), the idea that the landlord will not need to paint or clean the unit for a new tenant.
If you do not need another year, landlords are sometimes apt to renew for a shorter period of time. Again, the agent you originally used should be able to assist you with this process.
If you must move we recommend you contact an agent which is familiar with your desired area and you start your apartment hunt as early as possible. We recommend 45 to 60 days prior to your lease expiration. This will provide ample time and will avoid the pressure situation of having to settle because you are in a hurry. This will also allow proper time for the application process.
In short rental rates are still great; you will get much “bang for the buck”, but your choices may be less than in the past.
Miami Rent Seekers
Before Renting an Apartment in miami
Renting an apartment is a very serious decision which warrants a great deal of attention before a final decision is made. When choosing an apartment to rent, renters have a variety of factors to consider including, but not limited to, price, size, location, amenities, whether or not they want a roommate and how long they want to stay in the apartment. Those who plan to rent an apartment should consider all of their options before making a decision to ensure they are making the best possible decision. This article will discuss the importance of considering all of the possible options as well as the possibility of having roommates and the importance of reading contracts carefully.
Consider All of the Possible Options
When renting an apartment, the renter should first investigate all of the options available to him to ensure he is able to make an informed decision. This is important because the renter may not even be aware of all of the available options until he starts to for an apartment. The best way to find out what type of apartments are available is to do some research on the Internet and in newspapers and rental magazines and then start visiting apartments which seem interesting. In visiting the apartments the renter will get a better idea of the size and types of amenities which are available in his price range. He will also begin to learn more about the types of amenities available. This is important because not all apartments will offer the same amenities. Renters may not find what they are looking for unless they visit a few places before making a decision.
Consider the Possibility of Roommates
Deciding whether or not to have a roommate or multiple roommates is one of the important decisions a renter will have to make. This is an important decision because roommates can make a living situation either significantly better or significantly worse depending on a number of factors. These factors may include compatibility of the roommates, ability to pay the rent and ability to assist in the household activities.
Having roommates can make an apartment more affordable. Often larger apartments may be more affordable for two people than a smaller apartment would be for one renter. Additionally, apartments designed for two or more people often have a larger overall living space with a larger kitchen, dining room and family room. This makes the possibility of roommates very appealing to some renters.
However, there are some caveats to making the decision to live with a roommate. Care should be taken to carefully screen potential roommates to ensure they are not potentially harmful. Strangers do not present the only potential roommate problems. Problems may even occur when the roommate is a trusted friend. In these cases, compatible living styles may be the issue. For example, if one roommate likes to stay up late and listen to music or watch television and the other roommate likes to go to sleep early there can be some conflicts if compromises are not made. Also, if one of the roommates is particularly neat and the other rather messy, conflicts may arise.
Read the Contract Carefully
Whether a renter opts to have a roommate or not and regardless of the type of apartment they select, the renter should be careful to read the contract before signing it. This is important because a rental agreement is a legal document and the renter should understand this document before they sign the agreement. Many renters may never need to know the exact information in their contract document but if a dispute arises, the renter should be aware of his rights. Additionally, the renter should pay special attention to any sections of the contract which specify the landlord’s ability to evict the tenant. Contract sections specifying the requirements of the renter are also very important. This may include requirements for breaking the lease agreement in the event that the renter has to move before the lease period ends.