I'm beans new to real estate--I'll be closing on my first house next week and I'll be house hacking it, so this question is specifically about renting out rooms in your own house (as opposed to like a duplex).
1) How do you advertise the room so that you get quality applicants?
2) Do you do a credit check on them or any other screening?
3) Do you do a full on, official lease the same as you would with a regular property?
4) How do you manage the rent payments? What system do you use to accept payments, or do you just take cash?
5) Do you give them official, itemized receipts every month? If so, what do you use for those?
6) How do you take maintenance requests?
Do they just tell you?
7) How about parking? Do you charge extra for parking in the garage?
Sorry for all the questions, but I appreciate any help!
*Brand new not beans
1. Craigslist, facebook marketplace, zillow
2. Credit and background check is a must
3. Yes full lease per room/tenant
4. I would suggest cozy
5. Cozy has awesome features to collect rents and keep everything organized
6. Could be requested through the app
7. That is optional, maybe $20-$25 fee.
I hope this helps.
Ps congratulations on closing on your first house hack, cheers!
I’m new to this too, but first thing is first, this is a business and you need to treat it as such. THIS IS NOT A HOBBY. If you don’t look at it and treat it as a business you WILL get burned.
From some of your questions, I can already see some tenants will try to take advantage of you. You can be friendly, but you have to enforce whatever rules or lease systems you put in place and don’t let them slide. I can answer a few of your questions based off a few rental property management books I’ve been reading.
1. Getting the quality applicants don’t show up in the advertising, that’s in the pre-screening and screening process.
2. Pre screening: talk to them on the phone and get a feel for them. Let them do the talking. If they need to be in your house in 24 hours, hard pass. There are some but very few good tenants that need to move in right away. Screening: ask them why they are moving and get their previous landlord info. It May be a friend of theirs so ask questions only a landlord would know like their document history, maintenance requirements etc. the friend will stumble to answer if they aren’t true. Find the previous landlord info on your own, don’t just take their word for it. If they show up in pajamas, you might not want them in your house. Walk them to their car after the meeting, if the car is trashed, your place will be too. DO NOT LET THEM PAY IN INSTALLMENTS. If they ask this on the first meeting, you will NEVER get your rent money. Qualified tenants can pay the deposit and the first month’s rent. If they whine, move on because they will never stop whining and they won’t pay you either.
BE CAREFUL how you deny applicants. There are legal ramifications if you are deemed to be discriminatory. If someone is in a wheelchair and they want to move upstairs and you tell them that you’d rather them live downstairs because of the wheelchair, that would be a discriminatory case. If you don’t feel comfortable about an applicant, you will likely find something in their file that will deny them. Keep a denied applicant folder or file cabinet so If they try to say you didn’t rent to them because they were black, handicapped etc. you can cite the reason why which could be as simple as a low credit score. Maybe look for people in the 700 credit range for starters?
3. Yes. This is a business and treat it like a business or you’re done. Get an official lease, it will protect you and your tenants. Hire a lawyer familiar with lease laws if you’re unsure. Laws are different depending on the state. I just recently learned that Red states are better for landlords while blue states are better for tenants, make sure you know the law.
4. I would strongly advise against cash. There’s no recorded record of payment
5. Sorry, I’m still new to this so I can’t answer this question
6. BEFORE you even rent the property out, have maintenance request forms available. If an issue arises, record it on the maintenance request form and file it in that specific tenants file folder. When you get the issue fixed record the time date, service completed, cost. Keeping proper records will help if there is ever a legal issue. The tenants may tell you if something is wrong, but you have to inspect the property once a month or at least once a quarter to find issues they may not even be aware of.
7. Charging for parking is up to you. You can calculate that into their rent if necessary.
Based on your questions, if I were you, I would do a little bit more research before renting out the property because I detected a lot of red flags and you WILL lose money. There are at least over 60 tasks landlords are required to accomplish and It might be finically beneficial to read the book book about managing rental properties before jumping right in.
I hope this helped!
I house hack a 4 unit and use Cozy.co for management it's awesome. The site will take applications and run their credit/background. Once you approve the tenant it sets them up on auto payments so you never even ask for rent and it's all electronic so no receipts needed. For maintenance I just have tenants text me as long as you are in a nice area with good tenants people tend to be very cool but if in lower income area no way would I give cell and an email address would probably be better. For lease find a local realtor and ask them to send the official legal one for your area with all disclosures.