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April 27, 2010 1:14 PM   Subscribe

I am about to close on my first house in three weeks and it has a small apartment underneath the main house so I am going to go from being a life-long renter to home-owner and landlord in one fell swoop. Help me to be a good landlord and attract good tenants.

Since I am basically starting from scratch here I welcome any and all suggestions but I am especially interested in hearing from people who have been landlords and can offer some concrete advice on what has and has not worked for you. Some specific questions: did you write your own lease agreement or did you have a lawyer prepare it? How did you advertise your rental? What kind of questions do you ask prospective tenants?

And for all the renters out there what has made the difference between the "ok" landlords and the great landlords you have rented from?

Since my wife and I will be living in very close proximity (directly above them, sharing a driveway etc.) to whoever rents from us it is important to me that we have as convivial a relationship with them as possible.

Obligatory disclaimer: I know that you are not my lawyer and I plan on educating myself regarding housing laws in my jurisdiction.
posted by Bango Skank to Human Relations (22 answers total) 3 users marked this as a favorite
 
Are you small town or big city? I hear that online advertising like craigslist works for big cities, but it does not seem to work here (city of 200k people or so). Our good leads tend to come from newspaper ads and nothing else. (Yes, bizarre, I know.)
posted by fritley at 1:30 PM on April 27, 2010


Bits of insight from both the renter side and as a landlord. Some may seem straight-forward, but I'll write it all just the same. Though never an official landlord, I was the caretaker of a house for a while (parents owned it, friends rented it), and my grandparents own an apartment complex.

For the renters:
- Be open and honest with your expectations and limitations. Example: are parties OK? How loud? What happens if it's too loud?

- Do what you say you'll do. The biggest thing for me is landlords who drop in unexpected. To me, this shows a lack of respect for privacy and a lack of trust, or no understanding of boundaries. Yes, it's your property, but someone will be living in it as if it's their own. If you promise to call ahead or give 24/48/however many hours notice, do so, unless you're really worried about the person or the building.

- Treat your renter as a neighbor, not a lackey. You don't have to be best friends, but don't be a stranger. At the same time, if the person/people is/are introverted, don't push the Happy Landlord bit too far.

As a landlord:
- If you don't deal with a lawyer, at least read up on contracts and standard practices. Find out what the local requirements and limits are. Given all that, put all your expectations in writing. That way, you can rely on the written word, not just a discussion you had when the person/people first moved in.

- I understand you'll want to make money, but if you charge a little less than the going rate, you might be able to find someone who lasts longer. My grandparents didn't increase the rates as much as they could, but were able to retain a good relationship with their long-term tenants.

- Going off of what andrewzipp said: maintain the place like it were yours, and expect the same of your tenants. Document the area before you rent it, and clarify that to would-be tenants, so they know you have an accurate record of what the place was like. Then, you have proof of the condition if a tenant claims some damage was already there.
posted by filthy light thief at 1:32 PM on April 27, 2010 [1 favorite]


In addition to a lease, you may want to think about some "house rules" or other policies that you can put in writing and attach to the lease as a rider. I've been both tenant and landlord. The last two times I rented, the leases included a rider with house rules. These can cover your expectations regarding:

-smoking
-noise
-parties (not yes or no, but how late?)
-long term houseguests
-pets

From the landlord perspective: take detailed photos of the rental space. Ask the tenant to make a note of any damage existing in the unit when he/she moves in. Give the tenant a week or two to return the form, sometimes you have to sit in room for a few days before noticing something, but not more time than that.

We did have a tenant claim that a window was broken and a stair bannister was falling out of the wall when she moved in, and detailed photos backed us up when we said, "uh, no. that was not broken when you took occupancy."

Do make sure the appliances are in good working order, and be willing to repair/replace quickly as needed.

Agreed that not charging the maximum that the market will bear, but slightly below that, will generate a larger yield of potential tenants and tenants who stick around longer.
posted by ambrosia at 1:48 PM on April 27, 2010


I've been a frequent renter of parts-of-houses, and I'd like to echo filthy light thief: recognize and respect that your tenants are living in their home, not borrowing a part of yours, and that they need privacy. The best landlords I had left me alone most of the time, but were also friendly and flexible (as I was), and didn't push the rent increases to their limits. (I surmised that they knew they had a good tenant in me, and didn't want to encourage me to leave.)

The worst landlords I had, on the other hand, visited without giving notice, told me I was putting out "too much garbage" and always increased the rent as much as they could (legally). I wasn't sorry to move out.
posted by smilingtiger at 1:48 PM on April 27, 2010 [2 favorites]


1. Live in the house for a little bit, and use the space. Look for leaks, and bugs, and problems, and fix them up front before you try to rent it out.

2. Follow the laws, follow the rules, and be polite. Don't think of your tenant as a roommate, think of them as a customer, and when you think about entering their space, you are entering their personal home. When you give them a lease, you're giving part of your home away for the duration.

3. Keep maintenance up, because eventually you're getting that part of your home back, and you'll have a lot less to fix if you don't let it get bad in the first place (and if you don't have an angry, frustrated tenant making things worse than they need to be.)

4. Be consistent, and complete. If you don't allow your tenant to paint the walls themselves, also provide a guideline on how they can be painted (by someone they hire, or by you, or someone you hire, or not at all) and what colors aren't allowed (no black walls, no dark colors, nothing other than white.) That sort of thing. Spell it out in advance, and stick to it even if you don't like the specific color they've chosen, for example. Similarly, denote the common areas, unless you want him or her sitting on your front doorstep.

5. Accept up front that there are lots of things this person will do that you will not like, and if they don't break the laws or the lease, you'll have to accept them. Don't like him and his friends hanging out in a common area? Tough. Don't like the potted plants in his windows? Too bad. Save your frustration and ire for real problems; you'll have enough of those without manufacturing ones.

Finally: rent to someone you seem to have good communication with, if you can. Whether or not this is completely legal can be debated, but in Chicago I've seen more than one drastically overpriced apartment become heavily discounted as soon as the potential landlord met and approved of the person moving in. Not saying you should do that, but if you meet a person you think would be a good fit overall, don't sweat the small stuff too much.
posted by davejay at 1:56 PM on April 27, 2010 [1 favorite]


I recently broke a lease (as in bought out, not abandoned) with a naive and inexperienced landlord. It was an extremely unpleasant experience for everyone from the start due to a panicking landlord with zero knowledge of his/our legal responsibilities/rights. Don't be that guy. Please, please, please consult with a lawyer or otherwise educate yourself on your local laws and obligations.

Just like any business/professional relationship really, be straightforward, friendly, mature and get it in writing.
posted by wrok at 1:57 PM on April 27, 2010


As a tenant, I'd say you should check people's references more than their credit ratings. (said as a good tenant who always pays her rent on time, not so much her credit card bills....)

Be VERY specific about your pet expectations. But don't charge "pet rent" because that's just a dick move.

Have decent security features; good locks, chains if necessary, trimmed hedges, good lighting outdoors, secure windows.

If the apartment you're renting is small, then you're probably only going to attract younger and/or poorer singles, so that may mean more turnover (or college students, same thing). But decide what "type" of tenant would work best in that space, and shape your advertisement to suit. College students are mainly looking for cheap/safe; working people may pay a little more for nice surroundings that don't look depressing. Women are going to be very concerned about their safety. Dog owners like a bit of yard to let the dog run. Etc.

Once you have a good tenant, they can often help you find a replacement tenent when they're ready to move out (we did this twice so we could leave a lease early; happy us, happy landlord who didn't have to spend time showing the place).
posted by emjaybee at 1:58 PM on April 27, 2010


fritley: Small island actually - St Thomas, Virgin Islands pop ~100,000. Craigslist has been gaining a small following here recently but I don't think it has enough traction yet, advertising around here is mainly roadside signs/word-of-mouth or newspaper ads. I guess I'll put you in the newspaper ad column?
posted by Bango Skank at 2:01 PM on April 27, 2010


In some neighborhoods just putting a sign outside with a phone number works fine for advertising.
posted by mareli at 2:06 PM on April 27, 2010


Ooh, I forgot you lived on St. Thomas. You should rent it to traveling friends and MeFites (I say this as someone who would love to do so =)
posted by filthy light thief at 2:12 PM on April 27, 2010


If you're in the Virgin Islands and if you're place is a nice enough place, you might make more money doing short-term vacation rentals. There is a bit more work on your end (cleaning, upkeep, etc.) but it could be more worthwhile. And this way, you will be able to enjoy the off-tourist season months without any tenants (your higher daily/weekly rate would probably make up for this). Something to consider...
posted by 1000monkeys at 2:27 PM on April 27, 2010


Make sure that you do a "cash only" transaction for rent so you don't have to deal with taxes, if you file in the US. Try renting it out on a month to month lease after you get comfortable with the house. That way, if you don't like having a renter, you can easily kick them out- it's VERY tough to do if they have a lease.

Or, if you wanted to rent it out as a short term rental, you could furnish it and do it that way. I don't know the location, but if someone's coming in for the week, or 2, then you have the best of both worlds- someone to pay rent, and then a week later they are gone. You can also charge more this way.

There will most likely be issues that you don't/and won't know about until you have lived there for a while.
posted by TheBones at 2:30 PM on April 27, 2010


We have considered the idea of doing it as a short-term vacation rental for all the reasons people have suggested plus the fact that I am passionate about where I live and I love sharing it with people but have ultimately decided against it. I have friends here who do this and the income that they receive is very unreliable plus both my wife and I work full-time already and I don't think we'll have the time or energy to take on a project like this.
posted by Bango Skank at 2:39 PM on April 27, 2010


I am going to advise that you ignore TheBones' advice to keep it off the books. That said, there are a lot of tax ramifications to having a rental property (not just rental income but depreciation on the property), so if you don't already have a good tax guy, find one.

I had boarders for a while. I never consulted with a lawyer. I found some boilerplate lease language online, added a few terms, and went with it. I didn't have many problems with boarders, but I remember one: it was someone who moved in, never gave me back a signed copy of the lease (I didn't push him that hard), lived like a slob, complained about cockroaches (see if you can spot the connection) and then moved out after a couple months. Since I didn't have a signed lease, I didn't have any leverage against him, but all things considered it was just as well that he left. The bigger problem that I had was filling openings.
posted by adamrice at 3:17 PM on April 27, 2010


The house where I grew up has a mother-in-law cottage that was a rental since before we moved in (1982) -- the one tip that leaps to mind: mom said her experience got significantly better after she started having a property manager (realtor) handle finding & initial vetting on tenants. I think it helped that the realtor was someone she already knew very well.

During college I rented a similar cottage, which I loved...except my boyfriend & I ended up getting caught up in our landlords' divorce drama and having to move out somewhat unexpectedly. It's a long story, but I'd just say that keeping those relationships professional is a good idea.

Actually, we moved from there into an apartment in the upstairs of a house, where the landlady and her elderly mother lived in the lower half. They were great, friendly, no drama, never got up in our business. Except for calling when BF & I got into an ugly noisy fight, which was probably a good thing.

y'know, I should probably write her a nice letter, a thank you and an apology. we were kinda jerks moving out and leaving a mess...we'd just broken up and were moving to separate places, I had just graduated, so not super-considerate.
posted by epersonae at 3:36 PM on April 27, 2010


If the apartment you're renting is small, then you're probably only going to attract younger and/or poorer singles,...

And the disabled. Installing a few bars in the bathroom and other minor changes can attract an older, possibly quieter, tenant who is likely to be a long-term renter.

(Not that I'm older, or quiet, or even long-term... just disabled.)
posted by _paegan_ at 3:51 PM on April 27, 2010 [1 favorite]


Given that you and your wife are busy, you might not want the tenant to know you own the building. Inserting one or more additional layers between you and the tenant as needed (e.g., a property management company, a Realtor to lease it, an LLC to receive rent checks) could spare you late night clogged toilet calls and enable the tenant to feel less observed. The tenant will probably just assume you rent your space as well; if necessary, you can alibi your owner-like behavior (e.g., "we trade gardening for exclusive use of the garage").
posted by carmicha at 3:58 PM on April 27, 2010


I used to be a landlord in a 2 family house. Find out if there's a tenant's rights group, or other legal advocate; they'll have the tenant/landlord laws. The nicer the place is, the better quality tenant you can get. Clean fiercely, paint, repair. Don't get lots of fabulous furnishings; they take a beating, but everything should work well, and be of good quality. Get a nice plant or fresh flowers in when you show the place.

The most important thing is to put in the effort to get great tenants. Interview tenants carefully; ask questions. I used a rental agreement that specified my expectations. No late rent, ever. Late payers get in the habit, and don't catch up. Check references. Watch out for scammers if you use craigslist. Don't be too trusting; this is a business, and people will lie and cheat and steal. Don't lie, cheat or steal. I was flexible and tried to be nice to my tenants, most of whom were terrific.

Take pictures of the space before it's rented, and have a checklist for the condition of the place; both parties sign it. Way useful for when tenants leave.
posted by theora55 at 4:43 PM on April 27, 2010 [2 favorites]


you might not want the tenant to know you own the building

There are some advantages to this, but letting prospective tenants know that you live above them tends to make people who would have loud parties or otherwise prefer their landlord not live nearby choose a different rental. This can be a very good thing.

Pick someone who you will be happy to have as a neighbor, even if it takes you a little longer to find a tenant. Pay attention to how people act when they come to see the place, including when they leave. You might discover someone who otherwise seems like a good fit has a habit of cranking their car stereo to 11 -- probably not who you would pick as a neighbor.

I wouldn't start out with a below-market rent, if you are hoping your tenant will be a long term one once they've been living under you for a few months, you can always give them a nice Christmas present (money off the rent, that is).

You should be able to buy a lease form for your county/state/island.

Read over the landlord-tenant law for your area now, rather than after something goes wrong.
posted by yohko at 8:58 PM on April 27, 2010 [1 favorite]


Congratulations, the world needs honest landlords. I'm going to echo adamrice and say that you should stay on the right side of the IRS (and the law in general). The first thing you need to find out is what level of turn-over you are willing to put up with, i.e: month-to-month boarders or long-term leased tenants. Assuming that you are looking for tenants, I recommend these books:

1. Landlording (by Leigh Robinson): Full of good advices, with an emphasis toward litigious Californian rental market.
2. Aggressive tax avoidance for Real Estate investors (by John T Reed at johntreed.com).
3. CitiCreditBureau.com: for pulling credit checks.

These resources helped me much during the beginning.

PS: I would urge you to educate yourself quickly regarding landlord rights and duties and how to properly screen your prospective tenants BEFORE handing over the keys. In CA, you can be sued even before renting to anyone (ie. for discriminatory screening practices). Once you hand the keys over, a bad tenant can cost thousands and many months to get rid off (read on eviction law and horror stories about bad tenants). My philosophy is it's more profitable to not rent than to rent to a bad tenant.
posted by curiousZ at 9:49 PM on April 27, 2010 [3 favorites]


I don't know anything about Virgin Islands tenancy law, but you should definitely find out whether your relationship with your renter will be landlord/tenant or whether they'll just be a boarder (which is possible if you're sharing some facilities), and whether it makes a difference to your respective rights (it makes a huge difference where I live).
posted by A Thousand Baited Hooks at 4:53 AM on April 28, 2010


Thanks everyone for the great responses.

A Thousand Baited Hook: I'm pretty sure that we will be landlord/tenant - the apartment has its own entrance, porch, kitchen, and bathroom; the only thing we will be sharing is the driveway and the cistern.
posted by Bango Skank at 5:59 AM on April 28, 2010


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