As the owner of residential real estate, one of your worst fears is having a unit or property sit empty for an extended length of time. That’s because you are not only losing an income stream, but you may also be paying carrying costs such as the monthly mortgage payment, utilities, and insurance.
But in trying to fill these vacancies, it is still important that you conduct a thorough background check and other due diligence before handing the keys over to the next potential tenant. Otherwise, it could end up costing you.
Some of the biggest red flags to look out for include:
- Subletting without permission or notice
- Selling appliances and/or other items
- Taking out a mortgage on the property
While you may be receiving rent from an individual (or individuals) you leased a home or a unit to, these funds may not necessarily be coming from the actual inhabitant(s) of the property. In fact, your direct “tenant” may be subletting the property to someone else – likely at a higher monthly dollar amount. In some cases, though, your “tenant” may be getting money from their tenant(s) and not forwarding any money at all to you.
Another scam occurs when the tenant(s) in your property sell the appliances and/or other items of value, and then pocket the money. Oftentimes, the individuals will then disappear, making it unlikely that they’ll be sending you any rent payments at all.
One of the most extreme scams involves another individual taking a mortgage on the property. Given the rapid growth of the Internet, it is possible that a scammer could borrow against your property, and then leave it up to you for paying off the balance.
If you’d rather delegate tenant screening, along with other landlord tasks like collecting rent, maintaining the interior and exterior of your unit(s), and responding to emergencies, it may be time to consider a property manager. Contact us with any questions that you have regarding investment properties in Orlando or the surrounding Central Florida area.