4 Adults and 2 un-related kids under 18 applying for condo

General Landlording & Rental Properties
9yFollow

4 Adults and 2 un-related kids under 18 applying for condo

Ron Rohrssen
Rental Property Investor · Marion, IA · Member since 2016 · 150 posts · 74 votes
Hello. I'm looking for some feedback on a group of potential tenants that are pooling their resources to live in a 4 bed, 3.5 bath condo. There are 2 adult females and 2 adult males along with 2 17-YO males. Cummulatively, I think they will pass background checks. I'm only asking the 4 adults to apply and appear on the lease. I know that one of the 17 YO guys is a brother to one of the older males. I'll know more once I have the applications and background checks. The condo has a driveway and 2 car garage. I believe that everyone drives and cummulatively there appears to be 4 vehicles. Parking on the street is a little tight in this area, but manageable. I've had 4 vehicles in this particular unit before and everyone managed without complaints from neighbors. As far as I'm concerned, the adults are taking legal responsibility through the lease for rent, damage, etc. I'm viewing the 17 YOs as long-term visitors. Anything they may damage is no different than a related minor or a visitor. The adults on the lease are responsbile. Here's what I'm questioning: 1. When the 17 YOs turn 18, turning the lease period, do I need/want to add them to the lease and put them through a background check? 2. Am I thinking of the minors correctly as visitors or minors? 3. I normally do a 12-month lease. In this case, there may be advantages to a month-to-month. Thoughts?
0Reply
79 views

Most Popular Reply

Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
9y

Tell them you will not rent to them, period. Any other answer is incorrect and you are 90% likely to regret it badly.

When people pool their resources in order to qualify, it is a recipe for disaster. One or more of them will eventually lose a job or leave and the remaining tenants will be unable to qualify.

My policy is that I will not rent a single unit to more than two unrelated persons. By related, I mean that I would count a married couple or blood relatives as one person and then I would allow one unrelated person. Some examples of what I permit:

  • Husband/wife and a friend
  • Two friends, a boyfriend/girlfriend
  • Two guys that work together or date each other
  • A guy and his girlfriend, plus his brother

If you do allow more than two unrelated people to rent together, consider increasing your qualification standard. For example, I require an applicant to make 3x the monthly rent. If it's a couple, I combine their income. But if I'm renting to three unrelated individuals, I require each of them to make at least 2x the monthly rent. This way, one of them could move out and the remaining two could afford the place by themselves.

Long story short, I wouldn't touch this deal with a ten-foot pole.

The DIY Landlord Book4.7247 Reviews
WebsiteView Page
4Reply
See this reply in the discussion

15 Replies

Jump to latestLatest
  • Joshua Manning
    Realtor · Shreveport, LA · Member since 2015 · 79 posts · 23 votes
    9y

    I would keep only the four adults on the lease since they are the ones you made the original arrangement with. Also the 17 yo's are not likely to be able to pass your rental application after they turn 18, if your looking at things like Credit score, income Level, References, etc. many times 18 yr. olds are not in good standing in one or all of these areas, although their are exceptions to the rule I suppose. 

    I would keep the original lease agreement with them, and if you want, you could add a clause that gives them the option to claim the 18 yr olds as sub-leasers. It wouldn't really change anything the four adults would still be responsible for paying the monthly rent. But it might make it easier organizing the information for record keeping purposes

    0Reply
  • Michael Totman
    Real Estate Agent · Berlin, MA · Member since 2013 · 130 posts · 95 votes
    9y

    This sounds like 6 college kids getting ready to destroy your condo and piss off your neighbors.  Assuming there are at least 2 young couples here, what happens when one couple breaks up and decides to leave, can you force the 17 year olds to pick up the slack in rent? I think I'd decide that if the minors are not the children of the adults, and the minors can't sign a contract, then the minors can't live there.  All 6 drive, but only 4 cars? Are you sure?  I rented to college age siblings before, it was not entirely pleasant. Be careful with your screening. 

    3Reply
  • Joshua Manning
    Realtor · Shreveport, LA · Member since 2015 · 79 posts · 23 votes
    9y

    If your concerned with @Michael Totman point about one of the other kids leaving with one of the adults. You could set up the requirement that since they are paying to stay there along with the adults that they put the minors under a sublease under the condition that the sub-lease of the minors be equal in length to the lease of the regular tenants.

    0Reply
  • Michael Totman
    Real Estate Agent · Berlin, MA · Member since 2013 · 130 posts · 95 votes
    9y

    You would also make your lease mutual and exclusive, meaning they all owe rent together and each owes the entire rent individually in case they can't agree on how they split amongst themselves.  In my experience once one of these roommates decides to leave for any reason it starts to fall apart. You may get one or two more months out of it, or they may find a new roommate to take over, but that's usually the beginning of the end for college age kids.

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    Makes no difference what you do, this is going to be a difficult relationship and there will be issues.

    Do they presently all live together, if so you will need to make a on site inspection of their place before you decide. Get their address and drop in unexpectedly with paper work to sigh.

    If they are not now all living together you are tossing the dice.

    Do not under any circumstances offer them anything except a M2M lease. You want to remain in control of your property.

    1Reply
  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    If you rent to them all people living in the unit are listed on the lease,, after the minor's name you list it like this,,, John Doe, Minor, and date of birth,,, he is not required to sign the lease.. 

    I guess the real question might be who is legal guardian for the minors, I would ask and see what they say.

    Sounds like a mess, I'd personally take other applications.. 

    0Reply
  • Marcia Maynard
    Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
    9y

    My comment regards your idea of considering the two under-age fellows as "long-term visitors".

    I would advise you name all adults (age 18 or above) as parties to the rental agreement at the time of signing, provided they qualify, jointly and severally liable. For any authorized occupants who are under the age of 18, list them by name as occupants, not as visitors or guests. 

    Establish a separate policy regarding guests (or visitors). So guests remain short-term visitors and do not take up residency in the property.

    Once the under-age occupants become of legal age, you can decide to add them to the rental agreement as tenants, jointly and severally liable, or not. The benefit for them to do so will be that they can establish some rental history, but they would do so at the risk of being held accountable financially for the fulfillment of the terms of the rental agreement.

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    9y

    Tell them you will not rent to them, period. Any other answer is incorrect and you are 90% likely to regret it badly.

    When people pool their resources in order to qualify, it is a recipe for disaster. One or more of them will eventually lose a job or leave and the remaining tenants will be unable to qualify.

    My policy is that I will not rent a single unit to more than two unrelated persons. By related, I mean that I would count a married couple or blood relatives as one person and then I would allow one unrelated person. Some examples of what I permit:

    • Husband/wife and a friend
    • Two friends, a boyfriend/girlfriend
    • Two guys that work together or date each other
    • A guy and his girlfriend, plus his brother

    If you do allow more than two unrelated people to rent together, consider increasing your qualification standard. For example, I require an applicant to make 3x the monthly rent. If it's a couple, I combine their income. But if I'm renting to three unrelated individuals, I require each of them to make at least 2x the monthly rent. This way, one of them could move out and the remaining two could afford the place by themselves.

    Long story short, I wouldn't touch this deal with a ten-foot pole.

    The DIY Landlord Book4.7247 Reviews
    WebsiteView Page
    4Reply
  • Linda WeygantPro Member
    Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
    9y

    Here's how I would do it.

    (@Marcia Maynard and I tend to think alike, so some of what I'm going to say is a repeat).

    I've done these types of things before both as one whole lease and as separate leases.

    If you want to do it as a whole lease, here's how I would structure it.

    1.  List all of the adults as parties to the lease.

    2.  List the 17 year olds as Legal Residents.

    3.  Make sure your lease indicates that only these 6 people are permitted tenancy.  Anybody else is not a legal tenant.  Also set a limit for how long anybody may have a guest.  My lease states that guests may stay for up to 10 days and no more than 30 days in any calendar year.

    4.  Set up a reminder that once the 17 year olds turn 18, that you either re-sign the full lease or you put in an addendum that removes them as a Legal Resident and adds them as  a Party to the Lease.  All Parties should sign the addendum or the new lease.

    One thing I would check on for the 17 year olds is to make sure that they are either legally emancipated or that they have permission from their parents to live on their own.  Better yet, get the parents to co-sign the lease until they are 18.  You can get yourself caught up in some interesting kidnapping and statutory rape issues depending on the state and local laws if the 17 year olds are runaways or otherwise living a lifestyle their parents don't approve of.

    I have done this type of lease and they were honestly some of the best tenants I've ever had.  They were the most polite, respectful, eager to please group of young people I have ever met.  There was a little damage to the property when they left, but no more so than what you might expect for any tenant.

    Another way you could do this (and I do this as well) is set up each bedroom on its own lease.  This will allow your tenants to swap out roommates who aren't working out.  (Last thing you want, imo, is a roommate who is causing issues with the others stuck in the lease).  This does mean that you're stuck collecting multiple rents, but you can also evict only one person in the event of non-payment, not the whole group.  This also means that your vacancy will dip dramatically as having one bedroom go vacant is not nearly as impactful as having the whole house go vacant.  

    If you opt to go this route, the 17 year olds will need to be listed as Legal Residents attached to one or two of the other leases, or their parents can lease on their behalf and then flip the lease once they turn 18.

    Podcast Guest on Show #244
    0Reply
  • Joseph M.
    Saint Paul, MN · Member since 2015 · 31 posts · 15 votes
    9y

    Any contract with a minor legally allows them to just walk out of the deal at any time, for any reason, and you get no recourse whatsoever. I would not rent to 17 year olds.

    2Reply
  • Kimberly H.
    Residential Real Estate Broker · Chicago Suburbs, IL · Member since 2013 · 1k+ posts · 594 votes
    9y

    Just got something similar, 5 unrelated adults wanting to see a place, represented by an agent, for a single family home. Agent had never heard of no more than 3 unrelated in single family zoning!

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    @Nathan Gesner

    I agree with you 100% however the vast majority of landlords do not mitigate risk and will accept any tenant or group of tenants as long as the meet their minimum requirements. This group, any group for that matter, is a higher risk than most renters.

    Most will not see the risk. Many landlords will feel pressured to rent regardless of the added risks.

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    9y

    @Thomas S. and that's why the vast majority of Landlords don't do well as Landlords. It's what keeps property managers like myself well employed! ;)

    The DIY Landlord Book4.7247 Reviews
    WebsiteView Page
    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    It is probably the number one reason new investors fail and often face major financial losses.

    1Reply
  • Joseph M.
    Saint Paul, MN · Member since 2015 · 31 posts · 15 votes
    9y
    Originally posted by @Kimberly H.:

    Just got something similar, 5 unrelated adults wanting to see a place, represented by an agent, for a single family home. Agent had never heard of no more than 3 unrelated in single family zoning!

     Kim - You should always check your local zoning regulations on this. This varies on a city to city, county by county basis. You can drive a few miles out of a city and watch the # of unrelated adults swing from 3 to 5 commonly or vice versa. Lots of places in the Midwest have 4 as the number, since that is what springs out of the uniform zoning code model text. 

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free