Leasing your home can be one of the biggest steps you will ever take. Knowing what you are doing is essential to taking that step correctly. Understanding your lease and all the components is vital to your business, and from my experience, your sanity. Before even thinking of leasing your home, do whatever you need to ensure you understand every aspect of your lease, because in the end, if a tenant knows more than you, you could lose a lot of money.
The most important thing you need to know is who the person is, that is signing the lease. Sometimes just doing a credit check is not enough. Call the person’s references, and contact their employment. Make sure that the person that is actually signing the lease is employed where they say they are and is going to be the one living there. When I leased my home, a lady came and looked at it and said that she was looking for her uncle who was out of town. He was supposedly working with a government agency that was in Iraq and would be back in a few weeks. She ended up liking it, and faxed him the lease. He signed it and faxed it back. We moved to VA content that our home was in good hands. Well, things became very clear to us that it was not going to be a good situation when the tenants asked their realtor for the keys, and our neighbors called us and said they were moving in two weeks early. Yes, they told their realtor we gave them permission. So make sure that if you are leaving the state in which you are leasing the home, that you have contact with both your realtor, and theirs.
Your lease will obviously have a section for you to list the tenants that will be occupying your home. Check and double check with your future tenants that this is correct. Be firm with them that only the people listed as occupants may live there. In my case, the lady that looked at the house was the one that actually lived there. The gentleman that was on the lease never even set foot in my house. In fact, we can’t find him anywhere. His place of employment informed me that he quit working there a year before the lease was signed. He has never responded to any emails and never showed up in court. Yet in still, this mystery man owes us over $4,000.
The lady (and that is the nicest word I can say about her) stated that she was his guest. So please look at your lease. Many leases have an average of 45 days for guests. I urge you to make it two weeks and have the tenant call for permission to have any one stay past that two week period.
Review the section of the lease that states what the late charges are if the tenant does not make their payment on time. Most leases will state that if the rent is late, the fee is $25 for the first day, and then $10 a day thereafter. The late charges can not exceed thirty days. So check what your states laws are, but in TX, if the late fees are not paid by the time the rent is paid, then you can take the late fees out of the rent, therefore making the rent late, and the late fees continue again.
Look through your deductions section to see what you are entitled to take out of their security deposit. And whatever they say, they are not allowed to use their security deposit as the final months rent. And make sure you look through the section of your lease about accessing your own home. Most leases state that you may peacefully enter the premises at any time without first attempting to contact the tenant. So if you think for any reason that you need to enter your home, you are allowed to.
Check over little things on your lease, like yard maintenance to make sure your tenant understands who is responsible. Review the section on tenants changing the locks and let them know whether you give them permission to do that. And by all means, look at the section on subletting. When your tenants move out, make sure you send them a list of the deductions they owe you from the security deposit with in ten days. If you do not, the tenant can end up making you pay for those deductions.
The more you know and understand your lease, the less likely you are to have someone take advantage of you. Take it from someone who knows. It is a shame when you put so much hard work into your home and one person can come along and ruin everything you did.