People come in a variety of different shapes and sizes and their circumstances are even more complicated. It's this type of variety that makes the home rental market so interesting and it's no wonder that investors are seeking to diversify by renting their property out. When they do so, they may come across a number of different ways to populate the property and one is to rent it out to people who want to live as roommates, rather than having a single property for themselves. This kind of diversity is becoming far more commonplace in the Australian market, but do you need to be careful when taking it on for your place?
Renting to a Diverse Group
You may have a rental property that has several different bedrooms and perhaps some of these are even ensuite. This might allow you to rent out to individuals instead of a family unit and it may make your home more attractive in this respect. The individuals can add all their money together, in order to meet the total cost of the rent. However, you will need to set up very clear and precise guidelines for each of these tenants, otherwise it can quickly become very confusing.
Handling the Main Points
It doesn't matter whether the individuals living under the same roof know each other and are friends, or whether they have met through some online matching site. You still need to come up with a lease that is written so that each person's specific responsibilities are laid out. You cannot rely on "friendship" to get them to do the right thing always. Individuals can argue and relationships can sour.
Also, you should ensure that each of your prospects is screened as an individual, before signing any documents. They have to have a clean rental history and a sufficient amount of income, by themselves.
Each occupant has to be liable on a joint and severable basis for the damage that could occur during the period of the tenancy. The documentation has to set this out in plain language and also needs to indicate when the rent has to be paid by and how the property needs to be kept. Everybody has to sign this lease, so they are locked in.
How to Treat Security Deposits
Finally, ensure that you get a security deposit from each of the tenants, so that they have some "skin in the game." Otherwise, one tenant may accuse the other of causing damage and refuse any liability. Keep the deposits in the appropriate scheme until the end of the tenancy and only give them back then, even if one of the renters has left halfway through.
Bringing the Experts in to Help
This type of approach can be more complicated than a conventional rental lease, but it can broaden your home's appeal on the market. It's therefore a good idea to get a knowledgeable property management company on your side, to administer it effectively.