If you list lease units as well as homes for sale and your clients are looking to find a roommate or two to help with their costs, here are a few tips that might help them stay out of trouble.
Contributed by Joe Killinger, theRRD
After a prolonged search, you’ve finally found the ideal roommate. You meet for the first time. They sound perfect, friendly and appear to be responsible. So it’s time to sign the lease, right? Or just have them pay you half the rent? Not so fast. Before you welcome your roommate into your home, review the following mistakes that renters make when finding other roomies. Doing so could save you a lot of money, headaches and time.
- Not going over the contract extensively
Before you sign the lease go through each section to ensure that you can legally have a roommate. Communicate with your landlord that you are interested in having a roommate, so they can be added to the contract, and thus held to the standard and terms that you’ve already agreed to. If you’re allowed to have them, be sure to create a list of all the details for the roommate, this includes: parking space, how the utilities will be broken up, how you will keep the common area rooms clean, and of course how you are splitting the rent. Be sure the roommate agrees to and understands this contract. In other words, communication with your roommate and landlord is key.
- Not doing a walk-thru prior to signing a lease
Always do a walk-thru before signing the lease. During the walk-thru make sure all systems are operating, look for cracks, stains or anything that can be considered damage that you did during your time in the property. Take notes and pictures as you go thru the property. I would recommend creating a good walk-thru checklist that you and the new potential roommate each sign.
- Not having renter’s insurance
As a multifamily property investor, I find that many renters do not carry renter’s insurance. I highly recommend finding a good carrier and spending the money on a good policy. Renter’s insurance is especially useful when having roommates as mishaps can and will happen. A good policy may cost about $12-$15 per month but it will cover a replacement of your TV or laptop if it is stolen or damaged by a leak (many leases carry a clause that the landlord is not responsible for your personal property if it is damaged by a leak). Many policies will also cover property loss even if it was off premises, so if your car is broken into and your laptop is stolen it may be replaced. Some renter’s insurance policies may even cover you if your dog bites someone in the park.
- Not screening your prospective roommate
If you are going to sublet a room, be sure to screen your potential roommate even if they are a friend of someone you know since your friend may not know the true reason this individual is looking for a new place to live. A thorough tenant screening, which often includes a credit check, criminal background, and an evictions/liens and judgments search, may help shed some insight as to the renter’s motivation for moving to a new home.
Renting a great place to live can allow you to create an environment in where you can excel, don’t take short cuts as it can make your new home a living hell. Following the tips above can help save time, effort and money for landlords, as well as current and prospective tenants.
Have you had issues with non-paying roommates or undesirable roommates? We’d like to hear for you. If you know the law in these situations please share your thoughts?