A Guide to Renting Out a Property

It used to be a firm handshake, a solid look in the eye and a person's word were the benchmarks and seals for a deal done right. One's word was usually as good as a signature, though having ink put to paper only furthered the good will. Today, those hallmarks of negotiating and deal making have gone the way of the dinosaur in most instances. In the turbulent waters of the real estate market, this is painfully true. The toughest arena in the real estate market is the rental. And, for the most part, the roughest position in the game is the owner.

Rental properties can be huge boons for supplemental income. A common strategy for many home owners in the market to move is to keep the original house and rent it. And while many renters are sterling examples of forthright and earnest tenants, looking to keep the relationship one of trust and mutual benefits, the long road to finding, interviewing and vetting prospective tenants is something akin to an in depth FBI interrogation. In a small, unfurnished room with a single bright light bulb dangling from the ceiling, well muscled men vaguely resembling WWF wrestlers on each side of the prospective tenant's chair, the owner engages in a search for subtle eye movements, simple off handed gestures and deep forensic personal history queries that are all used in a quest to avoid "Renters Burn", a condition where the owner is stuck with a tenant that seems custom made to perpetually irritate and ultimately degrade their sanity to a point of utter remorse just for simply owning a rental property. It is a vicious condition, but one that can be mitigated to a good degree by following some simple rules that, in the end, forge a relationship between renter and tenant that wears neither party to their respective wits end.

Initially, the offer must be put out for a prospective renter. Be it Craig's List, a rental management agency or simple flyers and word of mouth, there is usually an initial rush of interested people. Have in place a set of non negotiable terms that will set a precedence as to who meets your criteria. These range from no pets, to 2 to 3 months security deposit, to number of occupants. From this first round of applicants, many can be further culled by simply asking for references and credit history checks. Most agencies will provide the owner with copies of these credit checks as part of the contract when you sign on with the management company. A prospective tenant can also receive 1 free copy of their credit history per year. References are a fair way, at best, to get an idea of your possible tenant. The point to remember is that references can be forged and many an owner will gladly write a glowing reference to rid themselves of a current case of "Renters Burn".

The next ring of Dante's Inferno of Renting is the personal interview. Here is where certain military and FBI interrogation techniques can be employed, though the large wrestlers flanking the possible tenant might be a bit overkill.. A resume of previous addresses and jobs, with contact numbers, is a good place to begin. A general line of questioning should follow, with topics ranging from length of time at current location to possible length of future tenancy. A viable reason for leaving the current address is another query that can shed light on the type of person who is looking to move in. But as good as the owner is at uncovering minute eye twitches, reading into casual conversation and administering lie detector tests , even the Intelligence agencies have had a few moles and "mistakes" they have let slip by. Just Google Aldrich Ames or Robert Hanssen.

After the field has been narrowed down to 2 or 3 people, the final decision should be based on how well the owner and prospective tenant get along. Do they seem comfortable with asking for the basic necessities to be performed by the owner in a timely fashion, or will they let things fester until the problem goes from 0 to 60 on the scale of major repair headaches? Is the owner comfortable with the task of penalizing a tenant monetarily for late and bounced checks? This is not a game for timid players. Deposit checks must be cashable, rent checks on time and the property cared for. It is a business and should be treated as one. This aspect of the rental world sometimes causes hardship when the tenant is a friend. It is a very shaky proposition to rent to a friend or family member when the time comes to enforce an agreed upon part of a contract. Feelings and familial ties come into play that are easily avoided when the renting party is not related.

The final step is to sign a mutually agreeable legal contract. There are basic forms available online, a rental management company will have them, or a lawyer can draft them up. Make sure all agreed to terms are on paper. At this point, the checks have now cleared and the terms agreed upon. Handshakes and people's words only lead to headache and monetary loss. At the end of the day, that is the only recourse if a case of "Renters Burn" erupts, or, on the flip slide, a nasty bout of "Owners Amnesia" breaks out.

From the initial ad to final signatures on paper and on to the first day in the new property, if all goes well, there will be a history started that could last for years to come, making both parties happy. The long process of vetting all possible candidates will have been well worth the time and effort and it will be a simple transition from house owner to landlord.