Property Management Question

[Matthew2145]

Hey Everyone,

I just had one of my tenants in Grande Prairie, ALberta call to say that his Girlfriend who he lived with in the unit has moved out and he wanted to know if he can continue to stay in the unit and just find a roommate to share the place with.

The question I have would be what do you guys do when faced with this situation? The tenants have been very good and keep the place very clean. The gentleman who wants to stay had a good credit check when he moved in and the payments have been coming out of his account and he is never late or NSF so far.

Should I be the one marketing for a roomate for the tenant? or should I allow him to market and find a roommate but then I would have to meet them and do my background checks on the potential roommate then have a new lease signed with both of them?

Typically people who are in the market to rent a room aren't usually looking to go on a lease so I am just wondering what some of the more experienced investors have done in the past for this scenario?


Thank you guys in advance for any insight.

 

[Matt Crowley]

You are doing the right thing. Preserve the relationship with the tenant. Sounds like he is making an effort to preserve the relationship and uphold his obligations.

The one thing I would do right away is to sit down and have a conversation with him about his responsibilities. Hopefully when you signed the lease both him and his girlfriend are identified individually and signed separately. This means that the lease is joint and severally liable. Basically, it means that you can collect rent from either one of them regardless of who is actually living in the home. Personally, I go over with every one of my renters who moves in so there are no surprises when one person moves out.

To answer your question, I don't allow rooming houses so I'm not the best person to ask here perhaps. I qualify each tenant on their own ability to afford the premises. I don't find that rooming houses pay off as there is a huge additional maintenance and property management cost.

I would really try to avoid doing something for free here. Personally, I don't see much of an upside. But if you think vacancy will be a problem and you want to help this guy out I would do the work of finding a roommate or at least being very involved in the screening process. Charge an additional $200 / month for additional persons on the lease. You have changed the risk profile of the property by allowing a new personality in probably without a prior living history with the tenant. I don't think that should go for the same rate.

Just my two cents. There are guys out there who love these rooming houses.

 

[Matthew2145]

Thanks alot Matt for your feedback. I always find your post very insightful.

I sent you a PM just to get some more details.

 

[Cory Sperle]

Avoid turnover any way you can. Rounder (sitck around) tenants are hart to find but easy to keep if you treat them well. If he moves out you will have to spend $$ renovating to get someone in, and in an area of higher vacancy which I assume GP is right now it might be even more difficult. Unusual that he would ask if he can continue if he is ther alone, unless he anticipates being short on rent for a while and is preparing you for that.

 

[TAMI]

You do have a responsible tenant that you want to keep . I would ask my tenant to find the roommate , then I do my own due diligence about the new tenant , and since the rental market in GP is very soft at the moment ,I may be more lenient approving the new tenant ( roommate) .

 

[Sherilynn]

The tenant should find his own roommate, and the new tenant must be thoroughly screened and approved by you. You could offer to place the online ad for your tenant, especially since you should already have good photos and ad copy.
If the tenant finds and approves a roommate (subject to your approval), that doesn't make your property a rooming house. If you find the second tenant yourself, then it is more like a rooming house.