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Questions to Ask Before Leasing Your Home to a Renter - 2007-08-18 |
While homes have been selling this summer in the Atlanta resale market, the volume of those sales has been disappointing, especially when compared to the record selling seasons of recent years.
As a result, many frustrated would-be sellers have turned to the idea of renting their homes. Their thinking is that if the home can't sell in a reasonable time period, it's better to get some rental income than it is to let the house sit on the market month after month.
If you are thinking about offering your home for rent, know that you should interview prospective tenants before you offer them occupancy in your house. You have a right to make an informed decision before you hand over the keys to your real estate.
Here are some questions every homeowner should ask of prospective tenants before they accept any application:
* Who will be moving in?
It's important that any landlord know exactly how many adults and how many children will be occupying the premises. While you may not discriminate against families with children, you can and should limit occupancy to a reasonable number of people based on the number of bedrooms and baths.
* Any dogs or cats, or any pets whatsoever?
Tenants sometimes believe that if they aren't asked about pets, then it's somehow allowable to keep cats and dogs in the house. The truth is that pets contribute substantially to wear and tear on a property, and an owner has a right to specify that no pets are allowed on the premises. If you don't ask, you likely won't know until the damage is done.
* When are you planning to move?
If you're running a classified ad offering your home for rent, it's likely that your home is available now. What you don't want to do is waste a lot of time answering questions and showing the house to prospects who don't want to take possession for another three months. Ask up-front when they plan to move.
* How long a lease do you want?
Turnover of tenants is one of a landlord's biggest expenses. Not only are there typical costs like painting and cleaning of the carpets, but there is the loss of income between tenants, the advertising, the marketing, and the time it takes to interview applicants. Thus it's worthwhile to give preference to renters who plan to stay more than a year. Likewise, you may choose to decline any offers to rent from those seeking a lease term of less than twelve months.
* Do you have good credit?
Recent actions by the Federal Trade Commission have made it almost impossible for small landlords to obtain copies of an applicant's credit report, even though the prospect has granted permission and the landlord has a legitimate business need.
Even so, you have a right to require a completed rental application that lists the applicant's job history, rental history, and credit references. You also have a right to ask the applicant about any creditors who give a less than satisfactory rating to your applicant.
And even though you can't view their credit report directly, you may find that a local tenant screening agency can develop an accurate picture of the tenants payment habits. Remember that old habits die hard, and your monthly rent may be treated in the same manner as past obligations.
* Do you have a full-time job locally?
If an applicant is just now moving into your area, they may not yet have a realistic expectation of enough income to pay the rent. You are not doing them any favors to rent them a house that they simply can not afford. And make sure that you confirm any listed employment is full-time instead of part-time. If the employer refuses to cooperate, ask the applicant for written authorization to release the needed information.
* Where do you live now, and have you given notice there?
If they live in a house now, I find it helpful to drive by their current residence and see what it looks like. You will probably get a good idea of how they will keep your house. Similarly, the condition of the applicant's car may give you clues as to their housekeeping skills.
And if the prospective tenant has failed to give notice of leaving at their current address, it's a sure bet that they won't tell you when they decide to move out of your house.
* Have you driven by and seen my house?
If you are interviewing a prospect by phone, be sure to ask if they have actually seen the house you are offering for rent. There is little activity more frustrating and less rewarding than setting an appointment to show your home to a prospect, only to see them arrive, then drive slowly away without even coming inside.
Instead, require that all prospects view your home, at least the exterior, before you begin the application process.
Getting honest and verifiable answers to these questions will help you make a better rental decision when the application is made.
NEXT WEEK: Questions every renter should ask before signing the lease agreement.
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Upcoming Events
BUYING FORECLOSURES IN GEORGIA
NEW for 2008: Bank-Owned Home Bonanza
This seminar has been updated and revised for 2008 to reflect the dramatic changes in the Georgia foreclosure marketplace. We are literally facing a flood of foreclosure properties, and there is profit to be made in each and every one of these homes.
Whether you want to build a portfolio of homes for your retirement or you simply want to find a better home for yourself and your family, this program is for YOU.
LAST CHANCE THIS MONTH!!
• Saturday, Oct. 11th, 2:00 P.M. until 5:00 P.M. - Renaissance Waverly Hotel in the Cobb Galleria
This COMPLETELY NEW SEMINAR examines the roots of today's foreclosure meltdown and explains how you can take advantage of this opportunity in your spare time.
Advance Tickets: $69; bring a friend for an additional $30.
Couples share materials.
Detailed information available under the “Seminars” button
This course approved for 3 hours of Continuing Education credit by the Georgia Real Estate Commission.
The Real Estate Investor's Institute will be held at Emory University on
November 22, 23 & 24, 2008. Make plans to attend.
Detailed information is
available under "Seminars."
This course is approved by the Georgia Real Estate Commission for 12
hours of Continuing Education Credit. Agents must bring license number.
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