Subleasing a Single Family Rental

[Alex Garcia-Mendoza]

Hi everyone, as part of a capstone project for the MBA program at the University of Washington, my team is researching the challenges with broken leases for landlords with single family rentals. Do you allow subleasing? If not, would you be open to subleasing the rental if the existing renter finds a qualified renter to replace them? 

[Chris Davidson]

@Alex Garcia-Mendoza coming from a tenants view subleasing makes sense they get out with less of a financial burden, and they shift it to a new tenant and landlord. There are more issues with subleasing then a standard turn. In a turn it is vacant and a clean start where subleasing can cause issues with security deposits. 

Having a tenant pick your tenants isn't ideal. It may work out great or it may not either way the landlord has their system while a tenant doesn't.

What is your focus on this? My guess is it could be very area specific.

[Richard F.]

Aloha,

Obviously this will depend somewhat on the local market. Over nearly 30 years, I have never allowed a sub-lease. Existing Tenant can find an interested prospect, but they must complete an application which is submitted to me as usual, with all supporting documentation. I approve/deny without regard for existing Tenants input. If approved, we simply pro-rate the rent on exiting and incoming Tenant; coordinate, but do NOT "lock in" a start date for new term until keys are turned over and move out condition is documented; and we require a written agreement if any furnishings or other property is "donated" to the incoming Tenants. We will not be responsible for repair or removal of any such property. Typically we can move out/move in same day, or very next day, without issue in these cases.

[Alex Garcia-Mendoza]

Quote from @Chris Davidson:

@Alex Garcia-Mendoza coming from a tenants view subleasing makes sense they get out with less of a financial burden, and they shift it to a new tenant and landlord. There are more issues with subleasing then a standard turn. In a turn it is vacant and a clean start where subleasing can cause issues with security deposits. 

Having a tenant pick your tenants isn't ideal. It may work out great or it may not either way the landlord has their system while a tenant doesn't.

What is your focus on this? My guess is it could be very area specific.

Hi Chris, 

Thank you for your response and feedback. Our research is focused on the status quo of breaking a lease. What we have found is that broken leases statistics are not closely tracked by the community of rental researchers; however we have found a tremendous amount of articles about it and is clearly an issues for renters and landlords. We are exploring the idea and thesis that technology is being underutilized in this area and could help landlords and renters align incentives, such matching prequalified renters with renters wanting to break their lease and allowing landlords to keep their revenue stream. 

[Alex Garcia-Mendoza]

Quote from @Richard F.:
Aloha,

Obviously this will depend somewhat on the local market. Over nearly 30 years, I have never allowed a sub-lease. Existing Tenant can find an interested prospect, but they must complete an application which is submitted to me as usual, with all supporting documentation. I approve/deny without regard for existing Tenants input. If approved, we simply pro-rate the rent on exiting and incoming Tenant; coordinate, but do NOT "lock in" a start date for new term until keys are turned over and move out condition is documented; and we require a written agreement if any furnishings or other property is "donated" to the incoming Tenants. We will not be responsible for repair or removal of any such property. Typically we can move out/move in same day, or very next day, without issue in these cases.

Aloha, Richard.

Thank you for your feedback and description of the process you follow when an existing tenant brings you an interested prospect tenant. Is the process you described above done via email and phone calls? Is there a platform that can facilitate this process for you? if not, would you use it if there was one available? 

[Richard F.]

Quote from @Alex Garcia-Mendoza:

Quote from @Richard F.:
Aloha,

Obviously this will depend somewhat on the local market. Over nearly 30 years, I have never allowed a sub-lease. Existing Tenant can find an interested prospect, but they must complete an application which is submitted to me as usual, with all supporting documentation. I approve/deny without regard for existing Tenants input. If approved, we simply pro-rate the rent on exiting and incoming Tenant; coordinate, but do NOT "lock in" a start date for new term until keys are turned over and move out condition is documented; and we require a written agreement if any furnishings or other property is "donated" to the incoming Tenants. We will not be responsible for repair or removal of any such property. Typically we can move out/move in same day, or very next day, without issue in these cases.

Aloha, Richard.

Thank you for your feedback and description of the process you follow when an existing tenant brings you an interested prospect tenant. Is the process you described above done via email and phone calls? Is there a platform that can facilitate this process for you? if not, would you use it if there was one available? 

 

I still process applications personally, I just am not a fan of algorithms yet...for screening tenants OR pets. I pull full credit report direct from Equifax, and Judicial records on line. I can usually make a decision within 15 - 20 minutes if provided adequate documentation initially. Sometimes I need to wait for an email response for employment verification, or additional info from the prospective Tenant, but at that point the decision is made, just awaiting confirmation on a particular element.