I am a single person, recently bought 2200 square feet house in Dallas county and unfortunately change in job nature, led to travel frequently. So i would like to use the mother-in-law unit [part of the house] for my stay and rent 1700 square feet to a middle age or senior couple.
This is my first attempt of renting the property.
Is it better to go through the rental agency? or try on my own?
How do I screen the people of similar interest?
Do I need a lawyer to draft the rental contract?
Input is greatly valuable.
@Sonu Sundar you can ask 100 people and get at least 75 different answers.
I would only consider renting it yourself if you were experienced. It seems like you are new to this so I highly recommend you hire a property manager. If you find a good manager, they will ensure you get a quality tenant that pays top dollar and takes care of the home. It will make the entire process easy. All you have to worry about is collecting your check and reading your statement each month to ensure everything is going smooth.
If you consider a property manager, please read on.
Many Landlords complain about Property Managers. We're glorified rent collectors. We're thieves. We don't care about the property like a Landlord would.
Do you want the truth? Bad property managers exist because of bad Landlords! If you hire the first PM to show up in a Google search or the one with the lowest management fee, you're getting exactly what you deserve.
When searching for tenants, do you take the first person to show up with cash in hand or do you screen them and look for the best applicant for your rental? Likewise, you can roll the dice on a Property Manager or you can put in the effort to "screen" them and choose the one that is best for your situation and property. It's not rocket science but it does take some work.
You can start by going to www.narpm.org and search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start.
1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!
4. Review their lease agreement and addendums. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance or problem tenants. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.
I hope this basic guide helps. If you have specific questions about property management, I'll be happy to help!
Greatly appreciate your valuable input. I will go with recommendations and do some more research and learning by getting a good Prty Mgt.
Thank you again.
@Nathan makes great points.
I think the trick is for you, that there is not really a good lease I've ever seen in Texas for renting part of a house. So you probably need an attorney to help you with this versus a property manager or any lease forms you can find on line. It may not even be legal in your neighborhood. So you should have the attorney check that out first. For example if your neighborhood or home is zoned for Single Family, you probably can't legally rent to an unrelated person.....that makes it multifamily. When/If the neighbors complain (and they always find out), then you'll have a mess on your hands, because you may have an illegal lease.
I'm not sure it is easy to find someone of similar interest. You would have to do this very informally among your friends, families, coworkers. When you start advertising it, then I believe you can't discriminate, and especially if you are using a relator/property manager to help you market the property.
Might be easier for you to rent the entire property to one family and for you to rent a smaller place separately.
Take note of Bruce's advice. Mother in law units are not usually legal to be used as rentals. They do not conform to building and safety codes. You may invalidate your insurance by renting out a illegal unit.
I would seek out a property management company that is good at what they do. Let an expert handle it and save yourself time and worries knowing that it’s done the right way. Happy to help anyway I can. I own a management company in Austin and I can help you qualify a company in your market. Have a great Friday and weekend !
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