Guidelines for Renting out my house in east Austin

June 3, 2015 11:09 AM

I am relatively new to being a landlord, I'd like some guidelines for what is the industry norm for landlords in my situation, deposit, background checks, questions I should be asking, information I should have available for potential renters, a good standard lease template? etc. details inside

I want some general guidelines for renting out my house in east Austin. I've never rented, and I've never searched for tenants. Is standard necessary payment to move in = first month rent, + last month rent + deposit equaling 1 months rent to move in? Do all people moving in sign the lease? Is co-signor usually required? Do landlords ask for pay stubs to prove gainful employment? What online site is most common for background checks of potential renters? Is 1 year lease standard? What questions should I ask potential renters in order to protect myself (I've had horrible tenants in the past), a good standard lease template where I can just fill in my specific details. (I am using a lease template a friend gave me, but it seems to be kind of crappy) any general advice you can give me? I plan to just post on craigslist. Thanks

posted by crawltopslow to Work & Money (4 answers total)

Best answer: Here is the Texas state law library landlord tenant resources page. In your position, I would call an Austin legal aid clinic and ask if they can direct you to good Travis county specific resources for small landlords. Many of the questions are not merely a matter of industry norm, but law.

Security deposits are necessary to protect your interest in the property, but how much to take is mostly up to you, although there's likely laws limiting how much deposit you can ask for. There are certainly laws governing how you hold the money (which bank, which account in your bank, must it be segregated from other funds), what you can use the deposit for (very commonly it cannot be used for unpaid rent), how to handle interest on the deposits will all be governed by law (either state statutes or local ordinances). For instance, in Chicago, I am statutorily no-defenses liable to my tenants for Deposit-times-X if I improperly handle the interest. You don't want to go by "industry standard" which is often wrong and set yourself up for those liabilities. I take a month's rent as a deposit because I've never had a tenant damage my place more than a couple hundred dollars worth. If I had expensive appliances or fancy woodwork or difficult to replace windows, I'd ask for more. I take only first month's rent to move in, but my tenant is responsible for the building move-in & move-out fees.

I have a broker who screens my tenants, by verifying employment and income, as well as credit scores and speaking to prior landlords. At a minimum I would do the same without a broker. I'd ask for paystubs and the number to call HR to verify employment. I'd call prior landlords for a reference. I'd run a credit check. I personally consider someone with a bad credit score a risk in terms of late or missed rent--I could be wrong, but it's important income to me and that's where I set my risk tolerance. Some people check court records for prior evictions.

I don't accept tenants who need a guarantor (someone on the lease as a non-resident who is liable for the rent in the event the resident on the lease does not pay), but I'm not in a college town. As a college student, I certainly signed more than one lease with my parents as guarantors. It's not necessarily a high risk, but it can be.

Standard leases often include weird/opaque/confusing language. One drafted with the intent that it "can be used anywhere" likely has things in it that are not enforceable in your town. It probably has things in it you don't care about and may not have things in it you do care about. Again, self-help resources at a local legal aid office are probably better. I like to think my tenants actually read the terms of the lease before signing it, so my lease is shorter than the standard lease my broker uses.

BUT my lease includes specific information relevant to my property and preferences (the lathe & plaster walls, what building maintenance will handle vs. when I personally should be called, which rooms can be painted and that I need the brand and color number so I can touch up between tenants, for instance). You should make sure yours does the same, especially as it's a house. Are there zoning rules about parking--how many cars are allowed; what about overnight parking? Who's responsible for mowing the lawn? What about trash pick-up? Do you need special bins from the city--who will cover replacement cost if it disappears or gets run over?
posted by crush-onastick at 11:55 AM on June 3, 2015 [2 favorites]

I'm not in Texas, but I use a service for screening applicants -- National Tenants Network. I don't know if they serve Texas, but if they don't there's probably another company which provides a similar service. They check credit, evictions, and criminal history as well as doing employment and landlord verification. I also use application, lease, etc. forms provided by a local company which adhere to state laws, so I bet there's something like that for Texas as well.

A Google search for Texas tenant screening brings up these results -- start going through those links to see if any of those work for you.

I don't usually require last month's rent, just first month and a security deposit equaling one month's rent. I do ask all adults to be on the lease and background check them all.

A lot of this stuff really varies state by state and even city to city, so do find local resources. There should also be local landlord classes that you can take to learn how to stay within the law.
posted by rabbitrabbit at 12:03 PM on June 3, 2015

Never been a landlord, but done lots of renting in your area, so maybe I can help.

Every place I've ever applied to rent in East Austin required proof of employment (or a guarantor form, but I think my current landlord wouldn't take that and only wanted proof of employment, which was fine by us), which has variously meant pay stubs or a phone number just to call employers and check. Last place required tenants to have renter's insurance, which came in handy when the condo flooded (landlord did end up needing to pay for some things, but not nearly as many as he would have if all our soaked possessions weren't covered). I've also never had a security deposit that was more than the cost of just one month's rent. With the market as it is here right now, that might be changing.

Current lease is on Texas Apartment Association form, copies of which are found all over Google, so while you couldn't use it you could at least compare.
posted by theweasel at 2:16 PM on June 3, 2015 [1 favorite]

Response by poster: Thanks for the help everyone, also found this guide for Austin Landlords on Crush's link
posted by crawltopslow at 1:31 PM on June 4, 2015