When listing your condo with a real estate agent in Miami, you will receive tenant offers in the form of a contract to lease. It's important to review all of the lease offers (contracts to lease) that you receive and the supporting docs. This article will cover what to look for when receiving and reviewing a Contract to Lease from a tenant.
In this article
What is a contract to lease?
Supporting documents that should accompany the agreement to lease
How to evaluate offers
Interview prospective tenants
What to do if you have multiple offers
What is a Contract to Lease?
A contract to lease is a form used by Florida Realtors, an agreement between a tenant and a landlord before signing an actual lease. It essentially acts as an offer made by a prospective tenant. Both parties agree to specific terms that will be included in a residential lease agreement. The contract to lease will outline the specific terms of the lease, including:
The rent price
The proposed lease start and end date
Money due before occupancy
Deposit amount
Amount of days the application should be submitted to the condo association
Rental payment due date
A target date for the lease to start
Utilities include in rent
Agents and the brokers involved in the transaction
The contract to lease is not a lease; an actual lease needs to be signed before the tenant applies to the condo association. The contract to lease is intended to be a legally binding agreement. If the tenant does perform their duties, the deposit made by the tenant may be claimed by the landlord. If the landlord doesn't fulfill their obligations, the tenant should have their deposit returned in full.
Supporting documents that should accompany the contract to lease
The tenant's agent should inform the tenant of the documents they will need to provide when submitting a contract to lease. The following documents should accompany the contract to lease.
Photo ID
Credit Score/Report
Background Screening
Income verification
An earnest money deposit, if one has been made before signing a lease. This is typically equivalent to 1 month's rent.
Photo ID
A valid state license or passport.
Credit Score/Report and Background Screening
A full credit report, including the tenant's score or a screenshot of their credit score. Most condos have property managers who handle applications for the building. They typically run the applicant's credit and background check. Landlords may ask tenants to submit an actual application with a credit pull also.
Income Verification
The last three paystubs or last three bank statements.
Earnest money
Typically the tenant agent secures one month's rent in advance to hold the apartment.
How to evaluate offers
When you have a prospective tenant, you should carefully review the Contract to Lease and the supporting documents. You should also contact the references that the prospective tenant provides. You want to ensure that you check the following:
The proposed rent price
What terms are the prospect proposing
Their income and job stability
Credit score/report
Background Screening
The proposed lease start date
Pro tip: Interview the prospect via in-person or FaceTime call. When you have the interview, have their offer in hand and confirm things like employment.
Interviewing prospective tenants
When interviewing prospective tenants, ask about the information they've submitted with the contract to lease regarding their job, income, and credit history. Interviewing prospective tenants can help you confirm if they can afford the rent and will likely make timely rent payments. Asking about their motivation for wanting to rent your property can give you some insight into how well they will care for your property.
If you have multiple offers, only interview the top candidates.
What to do when you have multiple contracts to lease offers?
If you have multiple offers, it can be tough to decide who to choose. You'll want to consider the applicant's credit scores, income, and rental history.
If you have multiple prospective tenants, you have the following options:
Accept the best offer if an ideal prospect makes a perfect offer.
Counter the best offer if you have an ideal tenant who isn't offering the highest rental price.
Counter all offers if all tenants are ideal tenants ask for them to make their highest and best offer to lease your condo.
Reject all offers if none of the offers are from ideal tenants or ideal rent prices.
Once you decide which prospect to move forward with, notify your agent and they will inform the tenant's agent and prepare the actual lease.
Conclusion
In conclusion, listing your condo with a real estate agent in Miami will bring in tenant offers in the form of a contract to lease. Reviewing all of the lease offers and the accompanying supporting documents is crucial to ensure you choose the right tenant for your property. Understanding what to look for in a contract to lease, interviewing prospective tenants, and evaluating multiple offers will help you make an informed decision. Following these tips, you can confidently pick the right tenant for your rental property and create a successful lease agreement.