BusinessHABTownhomes for rent: Do you have an empty room at home or want to make the most of a second property? Are you thinking of renting out the premises by room? Becoming a landlord can be a good way to supplement your income. However, it can also be demanding and complex. You’ll need to know a landlord’s responsibilities under the law and how to draft a proper legal agreement, prepare and advertise your property, and then find the right tenant.
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Townhomes for rent
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1. Check your city’s zoning bylaws. Be aware that your city may have zoning laws about renting. These may prevent you from renting to unrelated persons without a permit or license, for example, or limit the number of unrelated persons to whom you rent. Make sure that you will be in compliance.
- For example, the city of North Bay, Ontario, requires landlords to secure rental licenses. These are valid for 2 years, cost $300, and include inspections.
- You can find your city’s zoning bylaws on the municipal website or by visiting your local library and asking the librarian for assistance locating your local ordinances.
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2. Check your state’s landlord-tenant laws. Your state may also have general landlord-tenant laws as well as those that apply to rented rooms. You can find out about your local landlord-tenant laws by searching your state’s official website for links. Make sure, once again, that you will be in full compliance.
- To locate your state’s official website, type in “YOUR STATE.gov” or “YOUR STATE’S ABBREVIATION.gov” into your web address bar. For example, if you live in New Jersey, try “newjersey.gov” and “nj.gov.” One or both should take you to your state’s official site.
- Laws will vary from state to state. For instance, in California landlords must ensure that rental units meet the “standards of habitability.” These standards include access to a toilet and gas or electric heating supply, and a private, clean, well-ventilated room. The premises must also have functioning locks and natural lighting through a window or skylight.
- In the same state, you as a landlord have a duty to maintain the room’s “standards of habitability.” If you do not, your tenant can legally withhold rent.
Townhomes for rent
3. Draft a rental agreement. A rental agreement is a legal document that sets out the terms of tenancy for a set period of time. It is usually for a shorter period (i.e. 30 days) than a lease agreement. A rental agreement can also automatically renew itself, and the landlord may be able to change the terms with proper written notice.
- Make sure to have a description of the property in your agreement. This should include the address of the residence, the specific room to be rented (for example, “2nd story small blue bedroom” or “1st floor back bedroom”), and what rooms are considered common areas.
- List the amount of rent, how often it is to be paid (weekly or monthly), and the due date (for example, every Friday or on the 1st of each month). You may choose to take a security deposit, which will also need to be set out.
- Include the day or date upon which rent will be considered late and what type of late fee will be charged. If you have decided to allow your tenant to do work around the house, such as mowing the lawn, preparing meals, or babysitting in lieu of paying some portion of the rent, you will want to provide this information as well.
- Be sure to state the term of the lease in your agreement. For example, specify if it is a month-to-month agreement or longer. You should also state the tenant’s move-in date, or the date upon which he may take possession of the room.
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4. Create a list of “House Rules.” Draw up a list of rules to attach to the rental agreement. This will ensure that your tenant is clear on what you expect and what you will or will not allow. Provide a space on the House Rules for the tenant to sign, saying that she understands the rules and agrees to abide by them.
- You might want to include smoking in the rules. Do you allow smoking in your house? Are there certain smoking areas? Or do you not allow smoking on your property at all?
- Alcohol is another issue. Is your tenant free to drink alcohol throughout the common areas of the house, or must she confine any alcohol consumption to her room? Are you opposed to your tenant drinking alcohol on the property at all?
- Pets and guests can also be in the rules. How do you feel about the tenant inviting his friends over? What about overnight guests? Will you allow your tenant to keep a pet like a dog or cat?
- Clarify the use of common areas. Are there hourly restrictions on cooking or doing laundry? For example, will you allow your tenant to do laundry at any time? Use the kitchen in the middle of the night? Watch television in the living room at any time?
5. Consult a lawyer, if need be. The details of renting and rental agreements can be complex. Getting help from a lawyer will ensure that you have met all the legal requirements, and that you have drafted a thorough, legally valid rental document.
- A general legal counsel should be able to help you with setting up a rental unit. However, there are also lawyers who specialize in landlord-tenant law.
- To find a lawyer, look through a phone book or on the web. Search for “landlord-tenant lawyer, YOUR CITY.”
Townhomes for rent
6. Decide which room(s) to rent. An important order of business is picking where your tenant will stay. While the obvious choice is an already unused room, you may want to consider several other factors.
- Note the proximity of the room to yours and your family’s rooms. For example, if you have 3 bedrooms upstairs and 1 downstairs, you may wish to rent the one downstairs. This will give you both a bit of added privacy.
- The location of the bathrooms in relation to the rental room is another consideration. You can collect more rent for a room with a private bath, but you may have to give up having one yourself to do so.Try to weigh your privacy with your ideal amount of rent.
- Think as well about access. How close will your tenant be to an entryway? You may want to consider renting a room close to an outside door, so that his comings and goings do not disrupt you or your family.
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7. Determine how much rent to charge. You may choose to charge rent on a monthly or weekly basis. How do you set a rent, though? The answer depends largely what the local market will bear. You will need to take a variety of things into account.
- Note the going rate for comparable rooms in your area. If you have a university nearby, the student-housing department may be able to tell you the average room rent. Otherwise, check local print and online sites like Craigslist to determine what others are asking.
- Take into account the size of the home, the size of the room, and the number of other occupants.
- Your amenities should also impact the rent. These will include the type, size, number, and use of common areas like living rooms, recreation rooms, spas, or swimming pools as well as inclusive water, electric, cable, or internet costs. Access to kitchen facilities, the use of a laundry room, or a private bath count, too.
- The room’s proximity to a university, shopping, and/or local attractions will push the rent up. There may be steady demand from students looking for rooms, for instance, allowing you to charge more. Rentals near shopping districts or good transit generally bring in higher rent, as do those near local sites like a beach, state park, or lake.
8. Prepare the room. No matter how clean your home and rental room are, you will need to do some inspections and preparations before you start to look for a tenant. More specifically, you’ll need to clean, upgrade, and even do repair work.
- Empty the room. Remove all personal items, decorations, wall hangings, and furnishings from the room. This includes everything in the closet.
- Wash the walls, ceiling, baseboards, and trim. Using a liquid dish or hand soap and hot water, thoroughly wash the walls, ceilings, baseboards, and trim with a cloth or sponge.
- Clean all light fixtures and switches. Remove the light bulbs and glass fixtures from ceiling or wall lights. Wash the fixture with your favorite glass or all-purpose cleaner, then replace the bulbs and glass fixtures. Dry thoroughly. Wipe down all switches and switch plates with a disinfectant cleaner like bleach.
- Wash the doors. Wash the doors with soap and water and disinfect both sides of the doorknob and all handles or pulls.
- Make any necessary repairs to the walls, closet doors, ceilings, fixtures, or windows. This includes filling in holes, rehanging crooked or hard to open doors, tightening screws, and replacing any missing trim or flooring.
- Clean the floor. Make sure to vacuum and shampoo the carpeting and to sweep and mop all other types of flooring.
- Choose furnishings for the room. Make sure that the furniture you choose is clean, in good condition, matches the other pieces in the room, and fits in the room well, leaving plenty of space to move about. Favor sturdy but inexpensive pieces, as the furniture may wear heavily.
Townhomes for rent
9. Advertise the room yourself. Place advertisements where you are most likely to find a tenant or roommate who fits your needs. Be as specific as possible about the room for rent; include information about furnishings, privileges, amenities that are included with the room, and the type of tenant that you desire. Then, look for advertising venues.
- Check with your local college or university paper. If you are looking for younger tenants, focus your efforts there or with any bulletin boards at University Housing.
- Church and community center bulletin boards are a good place to post ads if you are looking for an older roommate. General circulation newspapers are another venue, as well.
- Websites like Craigslist, Roommates.com, and Roomster offer ad space for those looking for a room to rent or to let.
- Consider taking photos or even a video of the premises to have in your advertisement. Prospective tenants might be more likely to respond if they know exactly what to expect.
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10. Screen applicants. In all likelihood, more than one potential tenant will respond to your ad and you will have a choice. Make sure to do basic homework. You’ll want a tenant who gels well with you and your family, your lifestyle, and perhaps your values. Choose the best tenant according to your needs by screening them.
- Ask for proof of income. This may include paycheck stubs, previous year’s income tax filings, or a letter of employment describing the potential renter’s date of hire, weekly hours, and rate of pay.
- Request references. Try to get a sense of the tenant’s character and personality. If the applicant has rented before, ask for her previous landlord’s contact information. If she has never rented before, ask for two or three professors, employers, or friends who can provide a personal reference.
- Schedule an interview. Sit down with each applicant and discuss the property, room, rules of the house, her employment, work schedule, hobbies, and anything else that will help you to decide if the tenant is right for you.
11. Use a property rental service, alternately. For a fee, you may be able to find a property service that takes the onus off you and helps to advertise and screen potential tenants. If you are short on time, or if you do not live year-round in the property, such a service might be up your alley.
- Some services like Easy Rental Services focus on short-term leases and rentals. They will advertise on your behalf on sites like Airbnb, advise you on pricing, arrange cleaning, vet guests, and even meet-and-greet.
- Expect to pay for property services. Also be aware that such services might be limited in smaller urban areas.
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12. Execute the rental agreement. Once you have found a tenant, you will need to have her read and sign your rental agreement. Ask her to review and sign the House Rules, as well. Attach the House Rules to the agreement and provide your new tenant with a copy of both documents.
- Usually, rental agreements have a clause stating when the tenant may move in or “take possession” of the premises. Try to arrange a plan for the handover, either giving her the key ahead of time or agreeing to meet on the move-in day.
Townhomes for rent
13. More tips
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It is helpful to provide prospective tenants with a sheet that explains the steps that are necessary to begin renting from you. Common steps are Application, Background Check, References Checked, Holding Deposit, Walk-through Inspection, Move-in Paperwork. This sheet helps avoid many calls from applicants who want to know what’s next. You can include an estimated time for completion of these steps.
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If prospective renters will contact you via telephone, you may find it helpful to keep a list of answers to commonly asked questions. In addition, this sheet can include what a prospective renter should bring to their first visit to see the rental, (e.g., the application fee and their information needed to fill out an application).
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Conclusion
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In some areas, you must have an inspection done on the room before you can rent it. Contact your attorney or your local housing authority to determine if this is necessary.
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Some jurisdictions not only require a municipal license to rent to others, but also a state tax ID for submittal of the required rental taxes you collect, especially for ‘short-term’ rentals.
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