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To let or not to let sublet?

I own a rental property that brings in enough to pay the taxes and insurance with a little left over. Recently, I found out that my tenant, who just signed a new two-year lease, is subleasing the property for the short term as a vacation site. This kind of thing happened once before and is prohibited in the agreement. Do you think I should approach him about the situation or let it go until it becomes problematic?

Dear Dave,

I own a rental property that brings in enough to pay the taxes and insurance with a little left over. Recently, I found out that my tenant, who just signed a new two-year lease, is subleasing the property for the short term as a vacation site. This kind of thing happened once before and is prohibited in the agreement. Do you think I should approach him about the situation or let it go until it becomes problematic?

Catherine

Dear Catherine,

It's already a problem, because he's in violation of the lease agreement. Call him today and tell him to stop the sublease immediately. Let him know that he'll be evicted if anything like this ever happens again.

This may sound harsh, but an agreement is an agreement. You may not have experienced any big problems up until now, but what happens when he pulls this again and the next people who come in are a bunch of partiers? You could end up with broken windows, holes in the walls and a bad reputation. On top of all that, what if they leave and he doesn't have the money to fix things? It's all on you. Why? Because you lost control of your property!

As a landlord, I always try to be gentle and nice but really clear about things. But this guy needs to understand that you mean what you say in the lease agreement. Once more, and he's gone!

-Dave

Dave Ramsey is America's trusted voice on money and business. He has authored five New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover,EntreLeadership and Smart Money Smart Kids. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.

I’m debt-free except for my home, and I’ll have that paid off in about 12 months. I currently make $60,000 a year and live in an area of Florida that is designated a flood plain,

because a river that empties into Tampa Bay runs behind my home. Currently, I’m paying $1,070 a month for flood insurance. My house is worth $325,000, and water has only come up into

the yard twice in over 20 years. Since I’m doing pretty well financially, do you think I need to keep my flood insurance policy?

Trudy

Dear Trudy,

From what you’ve told me about the history of your property, it sounds like your biggest concern might be if a hurricane caused a backwash in your area. Insurance is already pretty

tough in Florida when it comes to those kinds of things, but you don’t want to run the risk of your house getting mowed down and losing everything.

If I were in your shoes, I think I’d like the protection of flood insurance. What you’re paying for the policy is such a small percentage of your world, compared to the value of your

home and your income. Keep the coverage, Trudy!