Are you thinking about renting out your family home? Maybe you have an opportunity to work abroad for a few years or the kids have grown and moved out and it’s time to downsize. Or you’ve moved to another house and want to turn the long-time family home into an income property. You’re just not ready to sell and renting will provide time and income as you consider your options. Converting the center of your universe into a cash machine sounds great, but many homeowners, especially those who plan to manage the rental themselves and someday move back into the home, can run into challenges.
A landlord’s emotional connection to the property make it their baby and seeing someone else living in it may cause anxiety. This is especially true when tenants maintain the property well, but perhaps not to the owner’s standards. Or when tenants maintain the property poorly, but not poorly enough to justify terminating the lease. Here are tips for handling the most common problems owner/landlords face when renting out your family home.
1. Remove everything. It’s common for owners to leave behind garden tools, hoses, ladders and cleaning items they used to care of the home. They want tenants to use them just as they did to keep the home clean and in good condition. In the rental environment, these items often disappear or are damaged by tenants. Regardless of their total value, they become consumables. At the end of the lease, it is difficult to charge the tenant for half a bag of potting soil, a third of a bottle of Windex, etc. Even outdoor chairs, tables, ladders and seemingly sturdy items often become extremely worn, scratched and broken are thrown away by the tenant. Rather than sweating the small stuff, it’s better to empty the house of everything and let the tenants provide their own cleaning supplies and patio sets – especially if you intend to move back into the family home later. Some landlords provide a cleaning guide for tenants, usually a one or two page description of how to maintain selected surfaces, such as stone counter tops, and a list of products that work best.
2. Change out valuable fixtures. Have you installed faucets, light fixtures or other items that are unusually expensive or that have special sentimental value? Rather than risking damage from tenants, it’s better to change out those items with sturdy replacements. Put those valuable items in storage or move them to your new home.
3. Ruggedize Spaces. Homeowners with personal connections to the family home will take better care of their property than tenants. Anything that was typically handled with care when the family resided in the home is a candidate for breakage by tenants. Consider replacing carpet with tile or sturdy wood flooring. Remove window coverings that could be damaged, such as fancy drapes. Normal wear and tear is typically increased by double when tenants occupy a home. This means that for every item you expect to wear out in about two years, expect tenants to wear it out in one.
Note: I’m often asked to define the difference between normal wear and tear and breakage. Normal wear and tear occurs over time with regular use that is not abusive. Breakage is usually caused by a specific act committed once (whether the act occurred on purpose or by accident) or by improper use of an item multiple times.
4. Document the property’s condition. In addition to compiling an inventory of everything, including model and serial numbers for all appliances, prepare a list of pre-existing conditions that will be noted on the tenant’s move-in checklist. These could include scratches, small stains or any item that can’t be fixed and does not distract significantly from the tenant’s use of the property. Take pictures of the entire home (typically 100 – 150 images) that can be used later to settle disputes regarding the condition of the home when the tenant moved in.
5. Require pre-approval for all changes. Most standard leases require the tenant to obtain approval before making any changes to the property. Check your lease to make sure it addresses these most common tenant violations:
- Re-keying, changing or adding door locks. Tenants often believe they have the right to re-key door locks for privacy, or to replace an un-keyed bedroom door knob with a keyed lock because they intend to use the room for an office. Landlords must have keys to all locks in the event of a fire or medical emergency. It doesn’t happen often, but landlords may be required to provide access if law enforcement presents a search warrant.
- Painting rooms tenants intend to re-paint before vacating. Landlords may have no problem with this scenario, but painting with the wrong type of paint can throw a monkey wrench into the plan, such as painting over water-based paint with an oil-based paint. There are now oil-based paints that can be cleaned up with water, but landlords should approve any paint before it is used.
- Plants in the ground. Tenants with green thumbs often like to dig and plant, whether flowers, bushes or trees. This might beautify the property, but it could also cause damage to surrounding plants, especially if the tenants plants trees. Most leases prohibit planting in the ground and if the tenant decorates with potted plants, drip plates must be used to protect against staining or damage to wood decks, concrete walkways, etc.
- Changing window coverings. The rental might be offered with or without window coverings. If drapes are provided, the tenant may box up the landlord’s drapes and store them in the garage so they can hang their own. However, if drapes are not stored properly (correctly folded in airtight bags) they could be damaged by insects.
- Bookshelves and Cabinets. Tenants might believe a bookshelf would look good in the study, but attached items should be looked at carefully before approving. A tenant installed cabinets in the garage without the landlord’s permission, only to hear a crash in the night and discover that the cabinets had fallen off the wall. The handyman called in to make the repair informed the landlord that the tenants had drilled the installation screws into soft drywall rather than wood studs as indicated in the manufacturer’s installation instructions. The landlord agreed to allow the cabinets to be re-installed, but the tenant was held liable for damage to the drywall and the cost of proper installation by the qualified handyman.
- Satellite Dishes. Tenants usually have the right to have a satellite dish, but it is reasonable for the landlord to designate a specific location where the dish must be installed. Improper installation of the dish and cabling, even by a qualified installer working for the signal provider, could damage the roof and cause leaks. Landlords may want to consider installing a dish mounting bracket and specifying how the cable will be routed to inside the home.
- Light fixtures. Tenants may not like a light fixture and prefer one that fits their personal taste. Landlords should be sure the new fixture can be easily changed back and that the original fixture is properly stored.
- Kitchen and bath faucets. As with light fixtures, tenants often change faucets and shower heads to a type they prefer. Original fixtures should be stored properly.
Another important condition of making changes should be pre-agreement on if the changes are to remain in place when the tenant leaves. While shower heads can be easily changed back to original hardware, removing bookshelves could cause damage to paint or the wall they are attached to. Any such damage should be the financial responsibility of the tenant regardless of whether or not the original change was approved by the landlord.
6. Inspect regularly. Finally, most rentals should be inspected twice per year – usually in spring and fall. Unauthorized changes should be noted and not allowed to stay in place if the landlord would not have approved them. Items requiring repair should be documented and scheduled for service. If unsure of the process, hire a qualified property manager or property inspector to do the work.
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