RASM NEWS YOU CAN USECOUNCIL PROPERTY MANAGEMENT
Understand the Rules & Regulations Involved with Rental Properties By: S. Brooks Beauchamp, Gulf Coast Rental Homes & Condos, Realtor®/LCAM/Property Management
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s a Realtor® in Florida, I am sure quite a few of your buyers are interested in rental/ income-producing properties. Buyers come down here thinking they are going to rent out their new property and make lots of money! What they don’t realize is there is so much more to it than the dollar signs in their heads. What I have found is that a lot of Realtors® out there do not know the nuances of the rental property market and are doing their clients a disservice, which can also get you in trouble by not knowing what the regulations are. As an experienced real estate and property management professional, as well as a licensed CAM (Community Association Manager), here are some of the things that I feel are most important to consider.
UNDERSTAND THE REGULATIONS READ THE HOA OR CONDO DOCS! These are the responsibility of the seller to have available (not the CAM). Read the rules and regs! That is the first thing I go to when working with a buyer or for that matter, a new owner looking for property management. As with any property in an Association, what are the Condo/HOA fees? Don’t forget these eat into your bottom line. It is also very important to have the buyer read the minutes from the previous board meetings - does the community have special assessments coming up, and do they have enough in reserves. All of these come out of the owner’s pocket.
RENTAL RESTRICTIONS Along those lines, because of the Surfside condo collapse, a lot of buildings are having structural work done which affects the rental capabilities. I speak from experience - no one wants a condo overlooking the water with a balcony that is off limits. There goes your rental income! Also, can the property be rented daily, weekly, and monthly? You also need to check the frequency of rentals (some condos are only once a year), and some can not be rented before two years of ownership. Sarasota and Manatee County ordinances are in flux and the City of Bradenton just implemented very 12 | ELEVATE [ JUNE 2022 ]
strict rental regulations. For instance, if the rental is in a Golf or Country Club Community, is it mandatory to have a membership? And if so, who pays? In addition, some Condo Associations have applications and must approve the renters or guests, and this can take up to 30 days to approve.
ZONING! Zoning is another major concern. Is the property in a 30-day minimum area? If yes, one or two-night rentals might seem like a money maker, but look at the wear and tear on your home. Also, typically the clientele is very different for a short-term rental vs. a seasonal rental. A week-long rental at the beach could mean “party on!” and you have to pay the consequences. You’ll also want to be in a desirable area or it will sit there vacant. Does the buyer know that the down payment on condos is 30% for a rental unit, and that the ratio of rental units to owner-occupied has a huge effect on insurance and mortgages? The owner must carry rental liability insurance – and some policies exclude pets, read the small print (what about a dog bite incident?). These pointers are just the tip of the iceberg; it is so much more involved than you think! Another article is in order to grasp managing a rental property, the expenses, the tax ramifications, the laws, and liabilities. Why don’t you join the RASM Property Management Council? Just $25 a year with educational seminars throughout the year to keep you informed, to be the trusted real estate advisor that you are! Our next seminar is on Hurricane Preparedness on June 6. Do you know who is responsible for the hurricane shutters, etc. of a rental property? You better come see! •
