Goal Achieved: Leased My Master Bedroom to a Great Roommate
BP Family,
Yesterday I successfully leased the master bedroom of my home. I know that doesn’t sound as sexy as leasing out an entire house to someone, but I did learn a lot in the process.
Late last year I purchased a duplex with an FHA loan using my 401(k) despite the overwhelming disapproval of the BP community (click here to read the thread). The units are 3 bed 1.1 bath two story homes. One unit is already leased. I live in the other. I knew I wanted to live in a home with enough bedrooms for both a home office (tax deduction) and roommate (more passive income).
I knew from listening to the BP podcasts that the quality of tenant /roommate I would attract is directly related to the visual appeal of my home, so I spent $1800 on new carpet and $350 on a handyman to fix various broken things in preparation for showing my home to potential roommates.
Here’s the process I used to find a great roommate:
(1)Looked at roommate ads for my area (mostly on Craigslist) and tried to find out what amenities and rent should be for my situation. Things like locked doors and separate bathrooms are important to roommates. I didn’t add a bathroom to my home, but I did change out all the bedroom doorknobs so they have locks with keys.
(2)Using the research I’d done on my market, I priced the rent slightly higher than market value and put an ad on Craigslist. Click here to read the ad.
(3)I seeked out all viable candidates for a roommate under the “Rooms Wanted” section of Craigslist. I E-mailed them with my name, phone number, and what I’m looking for.
(4)When anyone inquired about the room for rent, I got them on the phone ASAP. I asked for their phone number if it was an E-mail, then called them. If someone texted me about the room, I didn’t reply via text, I just called them.
(5)On the phone, I did my first stage of screening- I asked them a series of questions
a.What accomodations are they looking for?
b.Are they currently employed?
c.What is their pre-tax income on a monthly basis?
d.Explain that I’ll be running a criminal background check and a credit check on all applicants, and asked if they had anything related to credit or crime they thought I should know (e.g., foreclosure, felony, garnished wages)
e.Do they have any questions for me?
f.Can they meet at the Starbucks in my neighborhood and have a face-to-face meeting on Sunday?
At this point, the candidates still don’t know my exact address, only the neighborhood I live in as described on Craigslist. I scheduled the candidates to come to the same Starbucks on the same day and staggered our meeting times 30 minutes apart, so no one ran into anyone else, and I didn’t have to travel everywhere. Aside from the time factor, another great factor is safety. I was away from my home and meeting them somewhere public. After all, this is Craigslist.
(6)I used a tenant screening form uploaded by @marciamaynard to screen the applicants at the Starbucks meeting (click here to see the file in the BP fileplace)
(7)I told them I’d get back with them after I was done meeting everyone that day.
(8)I got the contact info of previous landlord and current employer, called them, and ensured the candidate was a good pick.
(9)I showed my home to those candidates I felt would be a good match for me.
(10)I told the best candidates they should fill out the application and pay the $35.00 fee. The application company is SmartMove ( click here to check it out) and they’re amazing. The process was SO EASY. I could do the whole app process from my smartphone.
(11) Approved one, got him to sign a lease I generated from www.RocketLawyer.com , he paid 1st month's rent and a security deposit, and I let him move in.
Lesson Learned- The biggest lesson I learned is that people can be very flakey. Don’t think you’ve got a tenant/roommate until they give you the first month’s rent, security deposit, and sign the lease. Several times I thought I had a roommate, only to find out they weren’t as serious about the situation as I was. They flaked out, never to be heard from again.