Author Archives: rmheditor
Rental House Rules: What to Include in Your Lease
If you’re going to rent your house out, you likely have some pretty concrete ideas of how tenants should conduct themselves while they occupy your home. Unfortunately, whether or not your tenants will automatically share these ideas is anyone’s guess. For this reason, most experienced landlords use their lease contracts to outline policies related to a number of common issues–not only does this help prevent tenants from unwittingly causing problems, it gives landlords grounds to evict the truly unruly. Beyond guidelines for paying rent, you many want to address the following in our lease agreement:
General Conduct
Tenants should conduct themselves in a manner that doesn’t unreasonably disturb other tenants or neighbors. You may want to establish “quiet hours” for your property so that it’s clear when music needs to be turned down and parties need to end. If you’ve split your rental house into two or more units, you should make it clear how common areas, such as the yard, may be used. In addition, you should make it clear that drug use and other criminal activity won’t be tolerated.
Parking
Spell out exactly where tenants should and should not park. To prevent your driveway or front yard from becoming a junk yard, you may want to require that non-operational vehicles be removed from the premises after a short grace period.
Garbage Removal
Believe it or not, getting tenants to properly dispose of waste and recyclables can often turn into a major headache. Make it clear that trash needs to be disposed of in a timely manner, that the garbage cans must be taken to the curb on trash day, and that hazardous materials and large items that don’t fit in the trash can must be removed from the property by the tenant.
Alterations to the Property
Everyone wants to make the place they live feel like home, so it’s important to be up front about what changes tenants can and can’t make to the property without consulting you. You should address paint, landscaping, and anything else you think tenants may be tempted to modify.
Proper Use of Outside Space and Common Areas
To ensure your property stays neat, tidy, and hazard-free, let tenants know what they can store outdoors, in common hallways, etc. Barbecues, sporting equipment, and children’s toys are examples of items that frequently find homes on balconies, decks, and in yards.
Proper Use of Plumbing Fixtures
Tenants can often be careless with what they pour down drains, put into the garbage disposal, or attempt to flush down the toilet. Indicate that plumbing fixtures should be used for their intended purposes only, and repairs necessitated by anything outside of standard use will be charged to the tenants.
Pets
If you’re going to allow pets, detail the number and type of pets you’ll allow. Require tenants to get your approval before bringing a new animal into the house. You may also want to mention that the yard should be kept free of pet waste. If you’re not going to allow pets, you may want to get it in writing that pet-sitting is not permitted, either.
Guests
While it’s certainly fine for tenants to have overnight guests from time to time, you want to prevent a situation where more people are living in the house than you have on the lease. For this reason, it’s a good idea to include some general guidelines on the acceptable frequency and duration of overnight visits. You may want to have tenants request permission if they plan to have guests for longer than a week or so at a time.
Maintenance
Make it clear that tenants need to report maintenance issues immediately, and in writing. You should also describe how repairs will be handled, e.g. that tenants can expect emergency repairs to be addressed within 24 hours and non-emergent repairs to be handled within a week. Remind tenants that if they cause damage, they’re responsible for the repair bill.
Expected Condition Upon Move Out
Write out your expectations for the property’s condition at the end of the lease: paint returned to its original color, nail holes patched, surfaces clean to the touch, all personal belonging and debris removed, etc. This way it will be clear what tenants need to do to get their security deposit refunded.
Increased Demand for Student Housing Good for Investors
U.S. universities are experiencing heightened demand for student housing as they cope with enrollment levels that have risen nearly 40 percent in the past decade.
The National Multi Housing Council’s (NMHC) National Student Housing Council (NSHC) recently reported that on-campus housing is insufficient nationwide. This trend has been fed partly by the number of Americans seeking to further their education during a slow job market. The number of students living on-campus reportedly rose 21.4 percent.
“The tremendous size of Generation Y, combined with economic uncertainty, have pushed enrollment to new heights over the past decade,” said Jim Arbury, NMHC’s vice president of Student Housing. “This has put tremendous pressure on universities across the country as they attempt to keep up with the demand for on-campus living, offering a new opportunity for student housing firms.”
That opportunity may extend to investors in single-family rental homes, as well as apartments and other properties which are typically considered the standard for students. Property management companies and owners may wish to investigate the housing preferences of students in their area and the policies of schools to determine whether they have a chance to expand into this space.
Schools in several states have seen major surges in enrollment and are experiencing the greatest shortages of housing as a result. A few have maintained residency levels, however, and likely do not present an opportunity to investors at the moment.
Common Lease Violations and How to Deal With Them
Lease violations, whether large or small, are an inevitable part renting your house out. No one is perfect, and even the most responsible tenants are likely to pay the rent a day or two late, play their music a little too loudly, or cause minor property damage from time to time. As long as these practices don’t become habit, most landlords are inclined to let small issues slide, and for good reason—turnover costs are steep, it can be difficult to find good tenants, and being overly punitive doesn’t encourage lengthy tenancies. On the other hand, there are several common lease violations that you should take care to protect yourself against, and take swift, firm action to remedy when they occur.
Unauthorized Pets
Tenants sneaking animals into their rentals is a common source of landlord-tenant strife. Even if you choose to allow pets, you may find that tenants add to their furry families without consulting you, increasing wear and tear on the property without your consent.
To prevent pet violations, spell out your guidelines in the lease. Include a clear description of what will happen if the tenant is discovered to have an unauthorized pet on the premises, starting with a fine and ending with eviction if the situation isn’t remedied. Before they move in, let your tenants know that you intend to schedule quarterly “maintenance visits” to test smoke alarms, replace furnace filters, etc. If they know you plan to visit the property every few months, they’ll be less likely to try to keep an animal on the sly.
If you suspect that your tenant is keeping a pet you haven’t agreed to, get photographic evidence, if possible, then follow through on the terms of your agreement.
Overstaying Guests
While it can be difficult to monitor and regulate the frequency and duration of visits your tenant receives, it’s important to include language in the lease regarding your expectations for overnight guests. To prevent semi-squatters from taking up residence without permission, landlords like to limit overnight stays to a few nights per month unless they give written consent for other arrangements.
The Landlord Protection Agency recommends including a lease stipulation such as, “Occupancy by guests staying over _7_ days will be a violation of this provision. In the event any other people occupy and live in this rental, in any capacity, without Owner’s written consent, it will constitute a breach of this lease and it is agreed that the rent will be increased $500.00 per person per month, and the Owner at his sole option may terminate this lease.” Once the tenant signs, you have the legal right to enforce the lease.
Property Damages
From excessive grime to torn up carpet, holes in the walls, broken fixtures, and other horrors, property damage is not only upsetting—it can quickly eat into your rental profits. The best way to protect yourself from tenant negligence, recklessness, or malice is to thoroughly document the state of the property immediately prior to move-in.
Investing in a professional inspection can be useful for this purpose—it gives you detailed, written documentation of the state of the property from a neutral third party. Another excellent approach is to take detailed photographs of key aspects of the property, then have the tenant sign off on the photo log as you conduct the move-in walk-though.
While you need to respect your tenant’s privacy, conducting semi-regular property inspections is a good way to keep things from getting out of hand. Oftentimes, simply driving by the property will give you a reasonable idea of whether or not the tenants are taking reasonable care of it, and whether intervention is required.
Home-based Businesses
When you rent a residential property to a tenant, you intend it to be used as a residence. While some types of freelance activities may technically violate this expectation without causing any actual extra wear and tear or nuisance, if your tenant is regularly hosting clients, shipping and receiving large quantities of supplies, or using the rental as a production zone, you have the right to put a stop to it.