Renting out two rooms

[caruser4]

Hey guys, I'm a new member here and I'm just looking for some info based on what I've seen on this site. In a few weeks I will become the owner of a beautiful 4-bed 2-bath house built in 2007 and I'll be having my brother moving in with me so we'll have two extra bedrooms and I need a bunch of advice. This is my first house and I'm just having friends move in with me. My first question is: Should I make a contract for the tennants?

[Amy]

Yes, you definitely need to have a contract for your friends (outsiders) to make things clear in case there is any dispute in the future about what they need to pay, and what not.

Even a handwritten contract is better than nothing. Not that you don't trust your friends, doing so will help you clarify things such as how much rent, utilities, food (shared) they will pay you, and their responsibilities, etc, etc ...because you are living under the same roof.

Congratulations to you for becoming a new homeowner/landlord soon!

[caruser4]

Originally Posted by Amy

Yes, you definitely need to have a contract for your friends (outsiders) to make things clear in case there is any dispute in the future about what they need to pay, and what not.

Even a handwritten contract is better than nothing. Not that you don't trust your friends, doing so will help you clarify things such as how much rent, utilities, food (shared) they will pay you, and their responsibilities, etc, etc ...because you are living under the same roof.

Congratulations to you for becoming a new homeowner/landlord soon!

Well, thank you so much. What kind of rules would you advise me to include? I don't want to be too strict since they are my friends but I definately don't want to get walked all over. I've already come up with no food or drink in the bedrooms and no smoking inside. Are either of those out of line? Also, I'll be providing basically everything they'll need as far as applicances such as a washer, a dryer, a refrigerator, a dishwasher, a microwave, central air, and I'm going to purchase a water softener and purifier. Should I raise their rent for that or are those basic requirements?

[Amy]

I would put down the basics like when and how much rent they need to pay per month, security deposit, late fee, pet policy, parking policy, etc...

I would increase the rent a little bit for covering the cost of maintenance of my appliances. Instead of asking your friends not to eat and drink in their rooms, I would state in the contract that they will be responsible for cleaning their carpet and room in order to get their security deposit back. Tell them not to smoke in your house is all right.

Your contract should be short and precise to cover your needs, so that your friends won't feel overwhelmed by a lengthy contract or "uncomfortable" dealing with you. They will appreciate it.

[caruser4]

Originally Posted by Amy

I would put down the basics like when and how much rent they need to pay per month, security deposit, late fee, pet policy, parking policy, etc...

Example: Rent and utilities are to be paid the first of the month in payments of $350 for rent, $20 for water, and $75 for power. If payment is not recieved by the fifth, a $75 late fee will be assessed. No pets in the house unless a pet deposit of $500 is recieved. No parking in front of the garage.

Does that sound good? Don't hold me to those numbers because they might either go up or down (most likely down).

Originally Posted by Amy

I would increase the rent a little bit for covering the cost of maintenance of my appliances. Instead of asking your friends not to eat and drink in their rooms, I would state in the contract that they will be responsible for cleaning their carpet and room in order to get their security deposit back.

I really like that! I'm definately stealing that idea.

How about having a "no holes" rule? I really don't want these guys nailing up my walls for posters and things like that ...or could I use that previous idea for this as well? How about stating in the contract that they'd be responsible for spackling and painting the room to get their deposit back (I'm planning on painting the entire house and cleaning all the carpets prior to moving in) or would that be too much?

[Amy]

Originally Posted by caruser4

Example: Rent and utilities are to be paid the first of the month in payments of $350 for rent, $20 for water, and $75 for power. If payment is not recieved by the fifth, a $75 late fee will be assessed. No pets in the house unless a pet deposit of $500 is recieved. No parking in front of the garage.

Does that sound good? Don't hold me to those numbers because they might either go up or down (most likely down).

Sound good.

You could state that they will be responsible to give back the room in its original condition except normal wear and tear, which is standard for all leases. If not, their security deposit will be forfeited to cover the cost for fixes. Make a checklist for prior-to-move in walk through for your friends. And don't forget to include the term of your contract, monthly/yearly, etc..

[caruser4]

Originally Posted by Amy

And don't forget to include the term of your contract, monthly/yearly, etc..

What does that mean? They'd have to live there a minimum of six months? What if they move out before that? Do they get a fine?

[Amy]

You can set it up as month to month if your friends are not going to stay there fixed for a 6 months or year. If the lease is for 6 months, then technically they have to honor that and stay for 6 month. Early termination of lease will incur a fine (1 month or a percentage of the rent, maybe).

Be sure to put everything in black and white.

[Amy]

If it is month to month, they should let you know a month ahead that they are going to move out.

[wyatt]

Hello,

Ya i am agree with that. You have to make a contruct between you and your tenant for the payment of rent . Thanks for sharing this matter to me.

thanks !!

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