Financial, Legal and Tax

How to Protect Yourself from Rental Schemes: Find a reputable property manager or do it yourself

Admin
Published Date: 2010-01-05 There has been a series of recent news reports about a variety of rental scams that have duped hundreds of homeowners and renters out of thousands of dollars. This complex rental scam too place in Denver where a man preyed on foreclosure victims, renting out their homes after they vacated the property. He kept all rental income and did it unbeknownst to the homeowner. This property manager in Florida requested renters pay in cash and pocked all rental income, again, unbeknownst to the homeowner. Let’s discuss some ways you can protect yourself from falling prey to a rental scam. First, if you hire someone to collect monthly rent checks for you, they MUST have a real estate license and the MUST deposit the money into an escrow account. This FDIC protects your money. Second, if you’re hiring a property management company or individual to manage your rent collections, you MUST ask the right questions. Here are some to get you started:

1. How long has your company been in business?
2. May I speak with another owner in your management program as a reference?
3. How do you find your tenants?
4. How do you qualify your tenants?
5. How do I get paid?
6. When do I get paid?
7. What fees do you charge me?
8. What fees do you charge the tenant?
9. What is your security deposit policy?
10. How do you inspect the property before and after the tenant?
11. What happens if there is a maintenance emergency?
12. What happens when a tenant doesn't pay?
13. What insurance do you have?
14. What insurance should I have?

Remember, the more questions you ask the better sense you’ll get if the person knows what he or she is talking about. A qualified and reputable property manager will be able to produce references on the fly and will have satisfactory answers to all your questions. Also, I always say if something sounds too good to be true, it usually is. Do your homework – like I said, reputable property managers will have no qualms about you doing your due diligence on them. If they do, they usually have something to hide, so move on.