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Property Management Blog

Published on Thursday, November 10, 2016

4 Safeguards For The Growing Tide of Roommate Renters

Renters who are strangers and yet will be roommates can present a challenge for leasing apartments.

Here are 4 safeguards to consider when renting to these types of occupants.

While individual renter households represent the highest volume growth since 2007, non-family roommate renter households have grown at almost twice the pace, or 2.9 percent over the same period, according to recent Axiometrics data.

 That’s an increase of 20.7 million “non-family” households consisting of either one person or two or more roommates, representing growth of 330,000 people per year sharing apartment homes – and potentially a lot of hassle for communities that don’t have clear policies in place.

Renting to Non-family Roommate Renters

Typically all parties applying for a lease have to meet screening criteria. But what happens when one roommate’s screening is up to snuff and the other’s isn’t?

That’s where corporate policy comes in. Most companies consider each party jointly and severely responsible for the lease. The question still is, “Do you use the lowest screening score or the highest in determining whether applicants are accepted outright or with conditions?”

Think of college friends who decide to move in together while they experience their first taste of independence and new jobs. One person not taking rent seriously is enough to ruin a relationship and leave the community spending unwanted time going to occur.

The situation can be worse in situations where two strangers decided to co-habitate after matching profiles on a roommate listing site. They may feel little if any obligation to act responsibly toward each other or the community, and only consider themselves obligated to pay their fair share.

Putting aside the potentially messy interpersonal issues that come when people share an obligation, there are safeguards communities can put in place:

4 Safeguards for Apartments And Roommate Renters

 1. The conservative approach is to use the lowest screening score in developing lease offers for renters and to treat both residents as conditionally approved while collecting some extra deposit or other protection for    the company. Requiring each roommate to pay a security deposit is the usual course of business since it creates ‘skin in the game’ for each person and provides protection to each roommate in the event of    unit damage at move out.

 2. Alternately, some communities require each roommate to provide a guarantor for a portion of the lease or requiring one guarantor for the entire lease. In the college graduate scenario this is usually the parent who has the best credit so both roommates and qualify. In roommate match-up scenarios it can get trickier.

 3. Providing payment options that protect on time rent delivery has also become a strategic amenity as many communities are finding that simply requiring automated payments with roommates isn’t enough    to assure performance. These companies are turning to options like rent from payroll which involves direct deposit from employer payroll of a portion of rent every time each roommate is paid to a bank account neither person can withdraw from. These programs also allow flexibility if one roommate will be responsible for a larger portion of rent.

 4. It’s also important to be clear about late fee policies for rent in arrears and the potential legal consequences to all involved if one roommate fails to perform. All parties need to realize the    implications of financial commitments.
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Author: Web Master

Categories: Property Management




Landlord Knowledge Base

If you’ve ever considered investing in a few rental properties in Philadelphia or Bucks County, PA now might be a good time. Prices are still low in Philadelphia, but have been on the upswing. According to the National Association of Realtors, the median price of an existing home in a US metropolitan area grew 13.7% between July 2012 and July 2013, the latest in a 17-month streak of year-over-year price increases. 

New landlords can choose from properties that are likely to appreciate and a large pool of potential renters.Licensed realtor Pat Mueller cites a few reasons for this trend: “Many families have lost their homes to foreclosure and are entering the rentals market for the first time in years. Mortgages are also harder to get now, so fewer people are qualifying for a new one.”The more skills you bring to the table to get into Houses for Rent in Philadelphia Philadelphia or Bucks County, PA and the more time you have to devote to your properties, the faster you can make a return on your investment. 

But investing in rentals can also be disastrous (or too stressful to be worthwhile) without expertise. Here are three professionals you may consult about your new rental properties, and what you can do to mitigate how much they cost you:Handyman:  You may need to hire a specialist for some work on your rental. If you need new outlets or new pipes, for example, hire an electrician, plumber or licensed contractor. Handymen usually tackle smaller, more manageable tasks, like:

  • Painting and paint removal
  • Drywall repair
  • Minor appliance repairs (fixing a leaky toilet or faucet, among others)
  • Installing tiling or flooring, moldings, windows, doors
  • Refinishing decks, cabinets and other wood items

When You Could Skip It: You could do any (or all) of these projects yourself if you have the time and interest in learning. Of course, this only works if you live relatively close to your rentals and are flexible enough to service them on short notice. And if you’re willing to respond to the occasional 5 AM basement flooding.

Average Savings: Any base rates or costs-per-hour vary from location to location in Philadelphia or Bucks County, PA , but nationally, you can expect to spend an average of $60 to $85 per hour for repair costs. It general costs less to hire an individual handyman than a handyman employed by a company. Expect an additional charge if your job requires a trip to the store for materials.

Resident Property Manager As the owner of a handful of rental properties, you may be able to manage them yourself, but if you want help, a single resident manager would probably be more cost efficient than a property management company. Resident managers may:

  • Serve as a handyman
  • Advertise vacancies in your units
  • Show apartments to prospective tenants
  • Review rental applications
  • Collect rents

When You Could Skip It: Again, the closer you live to your properties and the more spare time you have, the less likely you are to need a manager. The obligations of being a boss will also cut into the time you save on maintenance.

Average Savings: The national median wage for residential managers is just over $25 per hour. Research the wages in your community and adjust according to how much responsibility your manager will take on. 

Real Estate Agent: Once you’ve gotten your financials in order and done your own research on the neighborhood(s) you’re considering, you might contact a realtor to show you potential properties. You can also arrange for a realtor in Philadelphia or Bucks County, PA to show rentals once they’re ready to rent.

When You Could Skip It: It depends. Even if you’re a local, or have thoroughly researched the neighborhood(s) you’re considering, a realtor is a great resource for a first-time rental buyer. Realtors have access to data and statistics not necessarily available to the general public and first-time buyers may not know all the right questions to ask. Using a realtor to fill your Houses for Rent vacancies is less of a no-brainer, depending on your other time commitments or whether you plan to hire a resident manager who could do the same thing.

Average Savings: As a buyer of rental properties, as when buying your own home, sellers typically pay most, if not all, of the buyer’s realtor fees. In this case, Mueller points out there’s little reason not to work with a realtor. For help in filling your units in Philadelphia or Bucks County, PA, the services of a realtor would set you back between 10-20% of the unit’s rent per month.  Mueller recommends interviewing with several brokers before making your final decision to invest into Houses for Rent .

The Bottom Line: As a new landlord, you can’t necessarily control the flexibility of your schedule or the amount (and cost) of unexpected repairs to your properties. Rentals are a long-term investment. However, to maximize profits from your Houses for Rent, new rentals, you can buy close to home and start small. It is best to begin with just one or two properties. This will allow you to maximize the time you spend on your properties’ needs, and minimize the amount you’ll have to pay anyone else.


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