Episode 96: 3 of 3 Renting To Roommates
Summary
Renting to roommates can be an interesting situation for landlords, especially if the roommates are not financially involved. Today's show is the final episode all about tenant transitions, and we talk about the nuances about individual roommates renting your long-term units. As adding roommates to the lease is something that landlords often encounter, I discuss my best practices about accepting only full payments for rent, deposits, and only returning full deposits.
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Welcome to the final installment of our three-part series on tenant transitions. I'm Dr. Jennifer Salisbury, and today we're tackling the nuances of renting to roommates. Whether you're dealing with a couple or two unrelated individuals, the principles of evaluating and managing these tenants remain the same. Let's dive into the best practices for handling applications from roommates.
Evaluating Roommate Applications
When I receive an application from two adults, whether they’re a couple or just roommates, I evaluate their rental histories separately. It's crucial to ensure that each individual has a good track record as a renter, especially if they haven’t lived together before. Their past behavior as tenants is assessed independently, but their combined income is considered collectively, as they will be sharing the financial responsibility for the unit.
Managing Shared Spaces and Resources
Roommates often mean more vehicles, which can be a logistical challenge if your property has limited parking. It’s important to clarify in the lease how many parking spaces are available and where additional vehicles may be parked. This helps prevent any disputes or logistical issues down the line. Additionally, consider the total number of occupants, including pets, to ensure the living situation is feasible for the space available.
Operating as a Team
Once roommates are approved, I emphasize that they must operate as a single unit within the lease. This means making one consolidated rent payment and handling all lease responsibilities together. If one roommate fails to pay or causes issues, it affects both parties. This approach simplifies management and ensures clear accountability.
Handling Changes in Roommate Arrangements
Life happens, and sometimes roommates need to make changes. If one roommate decides to leave, they must find a replacement who can be qualified independently. The new roommate must go through the same application process. Importantly, I do not return partial security deposits. Instead, the incoming roommate can reimburse the outgoing roommate directly. This maintains the integrity of the lease agreement and streamlines the transition.
Lease Addendum for Roommates
To manage these scenarios efficiently, I recommend including a section in your lease that outlines the process for adding or replacing roommates. This should detail the application process, financial responsibilities, and any other relevant procedures. Having this information readily available helps tenants understand their obligations and simplifies the management of shared living arrangements.
Thank you for joining me in this episode of My Life as a Landlord. Renting to roommates can be complex, but with the right strategies, it can also be highly rewarding. I hope this series has provided valuable insights into managing tenant transitions. Until next time, keep educating yourself and thriving as a landlord!