From signing a rental agreement to choosing roommates, here are the things you need to know about renting to roommates as a landlord.
Living with roommates can be challenging. However, as a landlord renting to roommates, things become a little more complicated. You will have to carefully write a lease or a rental agreement. As a landlord living with a roommate, you still have the same rights as if you were renting out the entire unit to them. But there are more things you will need to keep in mind so you and your tenant can be happy. Things such as house rules are essential in situations like these. Let’s see what the most important things to know are.
Renting to roommates: a lease vs. a rental agreement
A lease versus a rental agreement – which is the right choice for you? Although many people think they are the same, they have one key difference. What makes one different from the other is the time for which you will be renting it out to them. A lease is signed for a more extended period than a rental agreement. A rental agreement lasts much shorter than a lease. It is usually signed from one month to the next. With the rental agreement, you can change the terms before you renew it. And, with a lease, you can’t change the rent price until it is over.
A lease can give you security for a more extended time. You don’t have to look for a new tenant and have secured income for a while. But, as a landlord renting to roommates, a better choice may be signing a rental agreement. In case you don’t like living with your roommate, it makes it easier to part ways. The fact that you rent to your roommate does not give you the right to evict them if you do not like living with them. That’s why a short-term contract is the better option for you. You can change the contract terms for the upcoming month if there is anything you wish to change.
What you need to have in your rental agreement or lease
In your rental agreement or lease, you can add helpful information for you and your roommates. Most importantly, it should contain the cost of the rent. Aside from that, you can have it written down when you want the rent to be due. If you want your roommate to leave a security deposit, write this down. You must, of course, include some basic information about yourself and your roommates. You can use this opportunity to write down some basic ground rules. Write down on what date your new roommate can move in. As experts from statetostatemove.com advise, staying organized during the moving process is crucial. Your new roommate will move in stress-free and can start unpacking on schedule.
For example, you can write down whether pets are allowed and under what terms. Another essential thing to include is maintenance. Even though you are living together, you still have to give them notice. You will have to tell them whenever you want to do repairs, upgrades, and other maintenance. Write down the number of days you will let them know beforehand. In the agreement, you can talk about basic house rules. You can write down things such as whether smoking is allowed or not. When you clearly define these things beforehand, you ensure you don’t encounter any problems later.
Choosing a roommate as a landlord
Finding the perfect roommate may seem impossible at times. When renting to roommates, you want to live with someone you can trust. Plus, you want to live with someone who keeps their home as tidy as you do. All of this may seem challenging to find in one person. However, with careful selection, you can find the ideal roommate to rent to. Before you make a final decision, contact them a couple of times. You want to see what kind of person they are and whether you have a similar lifestyle. Ask questions to see how reliable and trustworthy they are. You don’t have to be friends and like the same things. However, having the same viewpoint on parties and house guests is essential.
Even if someone seems like the perfect roommate, talk with multiple people. In case your first choice of roommate backs out, you will have someone else to call. You might be pleasantly surprised and find someone better than your first choice. Either way, you will be more comfortable with your roommate choice when you know you took the time to meet multiple people. One of the things that can help is to ask them for references. You can ask their friends or former roommates for their input. You will feel good about your choice when you know some people can say positive things about your new roommate.
Be prepared for emergencies
Sometimes, things don’t go as planned. There’s always a chance of your roommate suddenly leaving. They may accidentally cause damage to your property. That’s why being prepared for emergencies is very important. A security deposit is a valuable tool for securing the safety of your property. If your roommate moves out and doesn’t fix any damage they may have caused, you will be prepared. You won’t have to break the bank to get your property in good shape for your next roommate.
As a landlord, it’s best to leave some money aside if you can. Finding a new roommate can take a long time. And, during this time, you want to be secured. That’s why creating an emergency budget for this problem is crucial. Even if you find the perfect roommate, it’s still a good idea to have a lease or rental agreement. This will give you safety as a landlord.
To sum up
Being a landlord and renting to a roommate has its challenges. It is much different from a couple of roommates living together and paying rent to their landlord. You will have to be more careful with your choice of tenants. And you will have to find the fine line between being a landlord and being a roommate. But this doesn’t mean that being a landlord and a roommate simultaneously is impossible. It can be great. When renting to roommates, all you have to do is carefully select them and sign a contract. Now, you know you are secure and have found the perfect person to live with.
With age come issues. That's just how it is, in life in general. However, it also applies to properties. You can expect that the place you once rented out to tenants won't end up looking the same following their departure. Minor repairs are invariably required, even if the property has been regularly taken care of. Damages, however, should in no way be a part of the deal. Still, you may be struggling to determine what's considered a sign of aging and what occurred due to tenant negligence. Lucky enough, we've taken the time to point out the difference between normal wear and tear vs. property damage. Once you've determined what case your rental is falling into, you'll be able to act accordingly.
Normal Wear and Tear vs. Property Damage: The Difference and the GiveawaysThe majority of state laws suggest that your tenants aren't liable for the wear and tear that occurs due to everyday use. They are, however, held accountable for any damage that's a result of their carelessness. This could easily end up costing them their security deposit, at the very least. A notice to vacate and eviction are not off the table, either.
What Is Considered "Normal Wear and Tear"?
Issues caused by daily use and can't be avoided typically fall into the regular wear and tear category. Everything has a life span, and when someone's living on the premises long enough, certain things will require upgrading - or even full-on replacing after some time. The typical examples of normal deterioration are:
What Is Considered "Damage"?
While there's little to be done about wear and tear, damage, however, is undoubtedly preventable. It's the result of none other than absolute negligence or even misuse. It's often expensive to deal with, causing extreme losses for property owners, and thus, it might even earn tenants an eviction notice.
At times, damage can occur after tenants' departure, or rather, during their moving process. In most cases, the professional movers are in charge of relocations. When damages result from their work, it might be possible to get compensated if the company has general liability insurance. It's important to react on time - have the previous residents file a claim as soon as you've noticed the problem.
Identifying damage is difficult but not impossible. Here are a couple of examples:
How to Care For Your Rental Property and Address Damage?
Now that you are familiar with the notion of normal wear and tear vs. damage, it's time to discuss caring for a property. It's necessary to stay on top of the maintenance, as, down the line, it might prevent things from going south. Or, at the very least, it might prevent things from deteriorating any further.
The first step towards ensuring your property remains in the best condition possible is to screen the tenants before they sign a lease. Tenant frauds aren't uncommon, so taking an extra measure to protect your rental is absolutely warranted.
Create a Maintenance Plan
It's essential to keep up with regular maintenance while the tenants live on the premises. Talk to them about creating a maintenance plan. Have them inform you of anything that requires addressing promptly. If, for instance, appliances are reaching the end of their lifespan, replace them with new ones. Have the HVAC regularly maintained, as well. If you can't physically keep up with these tasks for whatever reason, it might be a smart idea to hire a property manager. They can keep in touch with your tenants. Furthermore, handling maintenance requests is what they excel at.
Have the Place Inspected Properly
We recommend documenting the condition of your rental both before the tenants' arrival and after their departure. Create an inspection checklist that a series of photos should preferably accompany. That way, should any issues occur, you'll have the necessary proof to handle them in an appropriate manner. Also, you could have future occupiers sign the checklist, too, for added protection.
Create a List of Charges
Hopefully, no damage has occurred on the premises. But if it has, once you have done a walkthrough of the property or had somebody professionally inspect the place, it's crucial to create a charge list to be sent to the previous renters. The list should include all damages explained in detail, along with the costs of repair. As an owner, you are required by law to send the list if the plan is to withhold the security deposit. Depending on the damage score, tenants could expect to lose either a part of their deposit or their entire deposit.
If you aren't quite sure about the costs of repair/replacement, it's necessary to contact someone capable of giving you an estimate. That someone may be a cleaner or a contractor. If it's the furniture or appliances that have suffered in the process, then calculate how much it will cost you to replace them.
The security deposit might not be able to cover the costs. In that case, you could take the case to court to get matters settled. Alternatively, mediation might help resolve the dispute.
Normal wear and tear vs. property damage – what is it and who's to blame?
Hopefully, you'll have managed to determine normal wear and tear vs. property damage difference by now. While there's not much to be done but tackle repairs yourself in the first case, the law is undoubtedly on your side as far as the second is concerned.
Cork and Rick Clark grew up in Reno, Nevada watching their father build and invest in real estate. They felt very fortunate to not only enjoy the direct benefits but also for the opportunity to learn about real estate investing.
"He paved the way and showed us the financial rewards," Rick shares, "Pops taught us the importance of a strong work ethic. If you want to be successful, you need to be on the job everyday."
The Clark family motto if we are going to reach a particular goal, you MUST be consistent by being on the job and working diligently everyday got the brothers through the 2008 crash, and lead their property management company into record-breaking growth and momentum.
Cork and Rick have used their knowledge of real estate and expertise in construction along with their unwillingness to sit still to build Clark Real Estate to over 700+ doors (households) under management.
Their favorite part of managing properties and real estate investments is that every day is different, every project is different, every house is different. They get to problem-solve every day--either from the office or out at a construction site. Their father and uncle, now in their 80s, modeled how to successfully work as brothers, and they have enjoyed working as a team. "Knowing somebody's got my back and that we have the same goals is the best part about working with my brother," Cork says. Rick is the second of seven children, and Cork is the younger brother as the fifth child.
The Clark brothers got started in real estate investing and property management by way of the construction industry. They had been in the construction industry since they were teenagers. With the construction experience "we could visualize firsthand all the possibilities," Rick says.
"We would look for the biggest problem property in a neighborhood," remembers Rick, "we would make offers on properties that weren't for sale." It wasn't long and the brothers had a handful of renovated properties that now needed to be managed. They started a property management company and took on leasing and maintenance for other real estate investors.
"No one knows the community better than we do. We're lifers," Rick smiles.
"We're hands on. We've started from the ground up. There are very few aspects of the real estate and investing game that we have not experienced first-hand," adds Cork.
Clark Real Estate brings drive and enthusiasm to folks looking to invest in the Reno area. Would you like to see their Map for building your real estate investment portfolio?
Clark Real Estate, Investments and Property Management offers a few fun tips for reaching your health, wealth and happiness goals for the New Year by making a few adjustments with your home!
1. Clear the Distractions: Have you ever noticed you get a boost of creativity or physical energy when you go on vacation? What if it's not because of the long day at the beach, but because of the clutter-free hotel room? The beds are made, the floor is clean, none of the usual paperwork is laying around. You're free to think and move about! When you make plans, you can go do it--without tripping over your kid's homework or frantically searching the house for something to wear.
What if your home always functioned this way?
Start with one distracting room or closet, and rethink it like you're going on vacation: If I was going on a 30 day trip, which items would I need to take with me? Pull those few items, and then move the rest. You can experiment by packing unnecessary items in your suitcase or in a distant closet or the garage to see if life is more enjoyable without the clutter. Or just move the items out of your every day line of sight. If you're feeling extremely bold and are ready for a complete change in your life, donate items to a Shelter or Thrift Store.
Continue to go through each room of your home each week or month. The more you clear, the easier it will be--as you'll start to feel the positive effects of a distraction-free home.
2. Live in your Investment: Robert Kiyosaki (Author of Rich Dad, Poor Dad) talks about how your home is a liability, because you're spending more on it than you're making from it. Many Americans assume that because their home may be increasing in value, it's automatically a good investment. Unfortunately, the math doesn't quite work that way! The Reno area is in an exciting growth period, and those who have invested in rental properties are going to be reaching those Wealth Resolutions sooner rather than later.
You can turn your home into an investment by finding a way to make money from it. Hrmm, how? If you own your home, you're free to rent out a room, or even your garage as a storage space. Tools like AirBnB allow everyday homeowners to make some extra income from their empty guest room or den.
If you're not comfortable with sharing your space, let's schedule a consultation to review the possibilities of purchasing your own income-generating property.
If you're renting the home you live in, there may be ways to generate income from it, as well. Please be sure to run any ideas by our office to ensure it is in compliance with your lease agreement!
Please feel free to call us when you're debating remodeling projects; we can help determine which projects will return the most value down the road if you choose to sell or rent out your home.
3. Tune In: Take a day to just observe your thoughts and feelings when you wake up, walk through your home, leave the driveway, and return. What parts of your home made you smile? What was frustrating? What can you fix, and what can you let go of? When our homes are in disrepair for extended periods of time, it can negatively affect our day, and wreak havoc on the property. Is there a strange smell in the cupboard? A crack in the wall? A dim light bulb? Let's get those things addressed right away! If you're just feeling resentment toward your home, it might not be a maintenance issue, it might be time to upgrade!
We are here to connect the right tenants with the right properties, and the right investors with the right investment properties. If you are feeling unsatisfied with your home, let's talk! We have a growing inventory of options just for you!
Are you thankful for your home?
Gratitude is the first thing we like to decorate our homes with during the holiday season. The simple act of reviewing what we're thankful for is the fastest and easiest way to make your space brighter. Here is a list to get you started:
I am thankful for
-the roof over my head
-a place to eat
-a place to sleep
-a place to put my things
-a place to connect with family and friends
And what else?
What are the special features of your home that make it unique? What furnishings and appliances make your life easier? What decor makes you feel special and luxurious?
Take a walk through your home reviewing each and every thing that you're thankful for.
Are you finding that you're frustrated, and can't find anything good about your home?
That's where we come in! We've found that the best place to start if you're frustrated with your home is to list off what you WANT your home to FEEL like.
When you walk in and kick off your shoes, do you want to feel relaxed or energized? Warm or cool? When you wake up in the morning do you want to see the sun shining through, or do you want those extra hours of sleep in a darkened room?
Let's review your wishlist so we can get you into a home that fits! Whether you want to rent or buy, Clark Real Estate wants you to be thankful for your home--and we'll work hard to make it happen!
Clark Real Estate offers Sparks and Reno property management services for landlords and homeowners out of state and out of town. Maximize your investment dollars by investing in Reno/Sparks! Keep enjoying the Southern California lifestyle, while we take care of your money-maker in Northern Nevada!
When I bought my first home in Sparks, NV, I didn't realize I would be moving to Southern California.
In the first quarter of 2014, Clark Real Estate and Investments exceeded its 400 rental unit mark. Brothers Cork and Rick are excited to continue the legacy, now third generation owners. A powerful team has been working to fill rentals, find new houses, and assist investors in the purchasing process. The Clark Real Estate team is shooting to reach 500 units by 2015.
Reno, NV, May 27, 2014 --(PR.com)-- In the first quarter of 2014, Clark Real Estate and Investments of Reno, NV exceeded its 400 rental unit mark. The company manages over 400 properties with a record low vacancy rate.
Brothers Cork and Rick Clark are excited to continue the legacy of real estate investment and property management, now third generation owners. The brothers have been helping with the family business since they were kids, working during the summer.
"Growing up within a family of real estate investors, contractors and plumbers, has given me a very diversified and complete understanding of what our clients expect," says Cork. The company focuses on building trust with both their tenants and landlords. “The philosophy is simple: we treat each unit as if it were our own,” notes Kristin Gandolfo, property manager.
The Reno/Sparks real estate market was hit hard in the recession, but with an excessive inventory of properties and an influx of tenants (ex-homeowners) the rental market is growing faster than ever. According to the US Census, 52.3% of Reno residents are renting their homes.
A powerful team at Clark Real Estate has been working to fill rentals, find new houses, and assist investors in the purchasing process.
The Clark Real Estate team is shooting to reach 500 units by 2015.
"Honestly, at this point, we just need more units because we don't want to turn away any quality tenants," Rick explains.
The team works aggressively with tenants to find the right home, or with owners to find the right tenant. “Just tell me what kind of place you want, and I’ll go find it for you,” says Isaac Conde, property manager. Conde looks beyond the current inventory at Clark Real Estate, confident that he can turn the property of a tenant’s choosing into an addition to the Clark collection.
With a proven track-record Clark Real Estate and Investments is confident that they will continue to hit their inventory milestones.
Clark Real Estate
305 W. Moana Ste C
Reno, NV 89509
Reno Property Management