FRBO: renting out your own property, and when to sell it instead
FRBO stands for for rent by owner, and it describes a property the owner rents out without a management company in the middle. You find the tenant, run the credit check, collect the rent, take the calls about the air conditioning and handle the lease. Plenty of FRBO owners do it well for years. Others reach a point where the numbers or the aggravation stop adding up. The question quietly changes from how to fill the place to whether to keep it at all. This page covers both. What the FRBO job actually involves in Florida, and how to sell a rental when you decide to, with or without a tenant in it.
Rental Value and Sale Proceeds
Send the address and we will come back with what the property would sell for today and an estimate of your net after the mortgage and costs. Useful whether you sell this year or in five.
What FRBO means, and who this page is for
For rent by owner simply means no property manager. The owner handles advertising, screening, the lease, rent collection, repairs and, when it goes wrong, the legal process. It is legal everywhere, and in Florida it is extremely common with single units and small buildings.
If you are looking for a place to live rather than letting one out, our South Florida rental listings are the faster route. This page will not help you much. The rest of it is written for owners.
FRBO owners usually arrive here for one of three reasons. Some are deciding whether to self-manage or hire somebody. Some cannot fill a unit and are starting to wonder what it would sell for. A third group has simply had enough of being a landlord and wants to know what getting out looks like.
All three are reasonable, and the honest answer to each depends on numbers rather than on advice. So most of what follows is about working out your own.
Read next: the full guide to managing your own rental · browse South Florida homes for rent
What an FRBO landlord actually does
For an FRBO landlord, screening is the part that decides everything else. A tenant who pays on time and looks after the place makes self-management easy, and one who does not makes it a second job. So the work that matters happens before anybody moves in: income verification, credit, references from a previous landlord and a consistent written standard applied to every applicant.
Then there is the lease. Florida has specific rules about security deposits, how they are held and the notice required after a tenancy ends. Getting those wrong is expensive in a way that is entirely avoidable.
Maintenance is the ongoing cost people underestimate. Air conditioning in this climate is not optional, and neither is the response time. Insurance has risen sharply here, and in a condo the association can add an assessment you did not plan for.
None of that is an argument against doing it yourself. It is an argument for pricing your own time into the return, which is the calculation the next section is about.
Read next: what a manager does that an owner has to otherwise · run the return on your rental
FRBO or sell: working out which is better
Work out what the property actually earns, not what the rent is. Start from the rent. Then take off the mortgage, taxes, insurance, association dues, maintenance, and a realistic allowance for the months it sits empty.
Compare what is left with the equity sitting in the property. A unit producing very little on a large amount of trapped equity is doing poorly even when it feels fine. The same equity could be working somewhere else.
Then there are the reasons that are not arithmetic, and they are just as legitimate. FRBO owners sell because they moved out of state, or because they are tired of the calls. Some sell because an insurance renewal or an assessment changed the maths. Some sell because a tenant turned a quiet investment into a problem.
We will give you both sides of that, including what the property would rent for now. And we will say so if holding is clearly the better call. A valuation is useful even when the answer is to keep it.
Read next: compare selling against renting it out · what South Florida investment property is worth now
Selling a rental with a tenant still in it
You can sell a tenant-occupied property in Florida, and you do not need the tenant's permission to sell. What you cannot do is behave as though the lease ends because the property changed hands. The lease runs with the property, and the buyer inherits it.
That shapes who buys it. A tenant on a long lease narrows the buyer pool mostly to investors, because an owner-occupier cannot move in. A tenant on a month-to-month arrangement keeps both groups interested. One ending in a few months sits somewhere in between, so the timing can be worth planning around.
Showings are the practical friction. Entry notice requirements apply, tenants have lives, and a tenant who feels ambushed can make a property very hard to sell without technically doing anything wrong. So we would rather bring them in early, explain what is happening, and schedule around them.
Selling vacant usually brings a higher price, since it opens the property to buyers who want to live in it. Whether that gain exceeds the lost rent and the risk of an empty unit is a calculation we are happy to run with you.
Read next: how a tenant-occupied sale is handled · what changes when a lease is in place
When the tenant is the problem
Sometimes the reason for selling is the person living there. Rent has stopped, the place has been damaged, or the relationship has broken down and the thought of another year of it is unbearable.
Two honest points about that. First, a property with a non-paying tenant does sell, usually to an investor who prices the problem in. Second, the legal process for regaining possession has its own timeline and requirements, and doing it yourself badly can restart it. That is attorney territory, not agent territory.
Which route is better depends on how large the discount is against how long and how expensive the legal route would be. We will give you both figures rather than one.
If there is damage, do not rush to repair it before we have looked. Investors buying this kind of property are often pricing the condition anyway. Money spent on cosmetic repair before a sale to a cash buyer is frequently money gone.
Read next: when a faster sale is worth the discount · selling a property as it stands
Condos, duplexes and small multifamily
What you own changes the sale more than most owners expect. A rented condo is sold partly on the building. Buyers and their lenders look at the association finances, the reserves, the insurance and any assessment. In some South Florida buildings that scrutiny has become the deciding factor rather than a formality.
A duplex, triplex or fourplex is valued on the income as well as the bricks. So the rent roll, the leases and the expenses become part of the marketing. Get those documents in order before listing. A clean rent roll genuinely raises the price, because it lowers what the buyer has to assume.
A single-family rental is the most flexible, since it can be sold to an investor or to somebody who wants to live in it. That flexibility is usually worth money, and it is the main reason lease timing matters.
Short-term rentals are a category of their own. Local rules vary a lot by city here, and a buyer is partly buying the permission to keep operating it that way, so the documentation matters.
Read next: how small multifamily property is valued · selling a property run as a short-term rental
Selling an FRBO property from another state
A lot of the FRBO properties we sell belong to owners who live somewhere else. Often they are people who moved away and kept the house rather than selling it at the time.
The closing part is straightforward. Documents can be signed remotely, a Florida title company or real estate attorney can close without you present, and funds move by wire. You do not need to fly down for it.
The part that needs local hands is the property. Someone has to coordinate with the tenant, meet the photographer and the inspector, deal with the yard and confirm the condition. We do that and we send photographs, so you are looking at the property rather than taking our word for it.
If the unit is empty, say so early. Vacant property has its own insurance and security considerations in Florida. An insurer that finds out a home has been unoccupied for months can take a position nobody enjoys.
Read next: selling a Florida property from another state · moving away and deciding what to do with the house
What you would net, and the tax question
The figure that matters is not the sale price. It is what is left after the mortgage payoff, prorated taxes, any association estoppel balance, liens, the title and closing costs and the commission.
We put that in writing with the assumptions shown, so you can compare it against what the property earns you per year. Seen side by side, the decision is usually obvious within a minute, and it goes either way.
Tax is the one part we will not advise on, and on an investment property it is the part most likely to change the answer. Depreciation taken over the years is treated differently from gain. There are also deferral routes that exist for investment property and not for a home you lived in.
So talk to an accountant before you sign anything. One conversation can be worth more than the difference between two offers, and we are glad to introduce you to someone.
Read next: the costs that reduce a seller's net · estimate your proceeds from a sale
Where to start
Pull three things together: the current mortgage balance, the lease with its end date, and last year's actual income and expenses rather than your estimate of them.
Then ask us for two numbers, a sale value and a current market rent. Those four pieces of information answer the keep-or-sell question better than any amount of discussion.
If the answer is to hold, we will tell you, and you will have a current value on file for the next time the question comes up. If it is to sell, we will talk about lease timing, whether to sell occupied or vacant, and which buyer type suits the property.
Either way it costs nothing, and we would rather be useful once than talk somebody into selling an asset that is working.
Read next: what the whole selling process involves · selling a property yourself without a listing agent
Where to get help that is not us
Managing your own property does not require a licence, and managing somebody else's for a fee generally does. The state licensing board publishes the requirements, which is worth knowing before you agree to look after a neighbour's unit.
Florida DBPR real estate licence informationThis page explains how renting out and selling a property work in Florida. It is not legal, tax or financial advice. Landlord and tenant rules, security deposit handling and the process for regaining possession all have real legal answers that depend on your lease and your facts. Speak to a Florida real estate attorney about the tenancy, and to an accountant about tax on an investment sale. We are glad to introduce you to either, and a valuation costs nothing in the meantime.
Where We Sell
Selling a rental property near you
Rents, insurance costs and investor demand vary a lot by town here. These pages cover what listing a property looks like in the places we sell every week.
Frequently Asked Questions
- What does FRBO mean?
- It stands for for rent by owner. An FRBO rental is advertised and managed by the owner rather than by a property management company. So the owner handles screening, the lease, rent collection and maintenance. Renters use the term to mean a place rented directly from a private landlord.
- Can I sell my rental property with tenants in it?
- Yes, and you do not need the tenant's permission to sell. What you cannot do is treat the lease as ended because ownership changed. The lease runs with the property and the buyer inherits it. That mainly affects who will buy and at what price, rather than whether you can sell at all.
- Is it better to sell a rental occupied or vacant?
- Vacant usually brings a higher price, because it opens the property to buyers who want to live there rather than only investors. Against that you lose rent while it sits, and an empty property carries its own insurance and security issues. We will run both numbers for your property rather than giving you a rule.
- Do I have to tell my tenant that I am selling?
- You will need to arrange access for photography, showings and an inspection, and Florida has notice requirements for entry, so in practice the tenant finds out immediately. Telling them early and scheduling around them works far better than surprising them. A tenant who feels ambushed can make a property very difficult to sell.
- Is FRBO worth it, or should I sell?
- Take the rent and subtract the mortgage, taxes, insurance, association dues, maintenance and an allowance for vacancy. Compare what is left against the equity sitting in the property. A small return on a large amount of trapped equity is a weak result even when the unit feels trouble free.
- What if my tenant has stopped paying rent?
- The property still sells, usually to an investor who prices the situation in. Regaining possession has its own legal process and timeline, and doing it yourself incorrectly can restart it, so that part belongs with an attorney. We will quote you both routes so you can compare the discount against the delay.
- My rental will not rent. Should I sell it?
- Maybe, and first find out why. A unit that will not rent is usually priced above the market, shown poorly or in worse condition than the competition. If the rent is right and it still sits, that is real information about demand. It is worth getting a sale value before another month goes by empty.
- Can I sell a Florida rental if I live in another state?
- Yes, and it is routine. Documents can be signed remotely and a Florida title company or real estate attorney can close without you present. What you need locally is someone to coordinate with the tenant and handle access, condition and the yard, which is the part we take on.
- Will I owe tax when I sell an investment property?
- Probably something, and it works differently from selling a home you lived in. Depreciation claimed over the years is treated differently from gain, and there are deferral routes available on investment property that do not apply to a primary residence. Speak to an accountant before you sign, because it can change the decision.
- Do you only work with landlords who are selling?
- No. We will give you a sale value and a current market rent, then tell you honestly which looks better. That includes when the answer is to keep it. We would rather give an owner a straight number once than persuade them to sell an asset that is working.
Other Reasons People Sell
Divorce real estate agent in Florida: selling the marital home
Selling the marital home: timing, valuation, net proceeds and what happens when one spouse will not sign.
Probate real estate agent in Florida: selling an inherited house
Selling an inherited or estate property: who can sign, what it is worth, selling as it stands and multiple heirs.
Short sale realtor in Florida: selling when you owe more than the home is worth
Owing more than the house will bring: lender approval, what it costs you, timelines and the alternatives first.
Work out your numbers
What is my home worth?
A valuation built from closed sales in your own community, with the comparables named.
Estimate your net proceeds
Work the commission, documentary stamps and closing costs against your own number.
Current market reports
Prices, days on market and inventory for the counties we cover, updated monthly.
How we list a home
What we do between the listing agreement and the closing table, phase by phase.
Talk It Through
Two numbers answer the keep-or-sell question
Onias Derilus is a licensed Florida broker. A sale value and a current market rent cost nothing, they commit you to nothing, and together they usually settle the question in about a minute.
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