The
relationship you strike up with your management company – and your personal
circumstances – will define just how much you get personally “hands-on”
involved in the business aspects of renting your property.
At one extreme you might hand over almost everything but ownership to the management
company and simply account for the income and costs in your annual tax return. Or you
might create your own company as a vehicle for your property rental activities and route
everything through that.
Proper legal and financial advice is the only way to be sure what is right for you, but
there are of course some extra issues to address as you move along the scale from private
individual to business operator.
DEALING WITH THE STATE
Florida is a very business-friendly state, but that does not mean it isn’t also
highly regulated.
Fortunately, Florida has worked very hard at making the mechanics of government accessible
to its citizens, a philosophy that has also been adopted by many businesses in the state.
This is especially useful in our context because it means that not only is there a great
deal of official information available on the internet, but you can also usually download
and print the forms you need – indeed, you can often file applications and records
directly with state departments and independent bodies online.
This is immensely useful in dealing with the official aspects of doing business in Florida
– from your home or office in the UK.
The main web portal to the state administration is MyFlorida.com. There is a complete
business portal within the site where you can access all the state agencies. Many of the
key departments have their own portals – like the Florida Department of Business and
Professional Regulation at MyFloridaLicense.com where you can check the status and
qualifications of potential suppliers online.
INSURANCE MATTERS
If you are renting out your property, you should examine the additional cover you require
to cover the business aspect of your property ownership. Exactly who may be liable for
what may vary according to the details of the relationship you have with your management
company and the people who rent your house. It may well be that your management company
carries all the extra insurance necessary to cover you.
… but – especially given the increasingly litigious nature of people today
– do take the time to clarify exactly who is liable for all the different scenarios
that may occur.
- General Liability Insurance. General liability insurance may be required to cover
you for personal injury claims from people on your property.
- Business Interruption Insurance. Also called business income insurance, this
insurance compensates you for income lost due to another insured event.
This is the insurance that would compensate you for the loss of rental income while your
homeowners insurance pays to have the property repaired for example.
- Umbrella Insurance. Claims against general liability policies in particular can
sometimes run into millions of dollars these days – more than typical policy limits.
Umbrella insurance is an economical way to simply increase the amount covered by these
policies.
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