I know many of you have rental properties, so I figured the WERA Magic 8 Ball is the place to ask. We are going to rent the house we have for sale. The house will continue to be for sale, and the renter is aware of this and fine with it. We know the renter personally but we want a basic lease to keep it all honest and stay friends. We are going to do a month to month and have agreed to 30 days notice once the house sells, but we have a few other expectations that we want to have documented as well. 2 main questions: (1) do any of you have a simple boiler plate lease that you use? (2) what makes a lease binding? We agree to the terms written down, we/they sign and date? Or more to it? Thanks for any real world input. Mark
you can google landlord and tenant laws for your individual state Mark. In FL anyway, m to m only requires 2 week notice for either party to cancel, but you can stipulate in writing 30 days notice required.. (considering a house closing would take at least a moth that would be better for you both). LL and T will show time frame allowed to give deposit back for your state (usually 2 weeks, with written notice on anything withheld). Any terms are binding, verbal or written, but if not written it's "he said she said". So best for all involved to get it in writing. I bet there are basic leases on the internet you can print out but looks like someone above is sending you one. Will just need to ad an addendum that it's month to month, with the 30 day notice thing ... Friends or otherwise, it's really best to get everything in writing. We all know how things go with bike sales if ya don't
^^^^ thanks Greg! EDIT - yeah everytime I think about handshake deals - the Probst debacle comes back to me.
There are some other details to consider before renting your personal residence. -Does your mortgage allow it? -Do you have commercial insurance? -Have you made the appropriate changes to your property taxes (mostly removing your exemptions)? If you have your taxes and insurance escrowed with the bank a couple of those above can make your life difficult.
Thanks for the input Steve. Luckily property taxes and insurance not escrowed. Talking to my insurance guy tomorrow to confirm any changes I need to make to existing policy. Also touching base with lender but my understanding that given circumstances there is latitude on renting while we pursue sale. Again confirming details with mortgage company.
Just curious....would the tenant consider a longer term lease if the purchaser wished to buy the house as a rental unit? Something to consider for the sales sheet.
IF its his only place he doesnt need to do ANY of that. First thing I would do as an owner is remove any 3rd party escrows. The only thing I would suggest is the renter get rental insurance for their belongings. Also make sure that the property doesnt have any issues that could cause injury...like slick stones or tiles on stairs.
In Illinois, trust me stay in Ohio. We are getting the hell out ASAP. Serious question - How does the “contract for deed” work? We really don’t want to rent, just sell house.
I always regret posting in real estate threads but you need to check with a real estate attorney. The rules vary by state. The Dodd-Frank act is sometimes applicable. I think most of the professionals have gone the lease-purchase route rather than land contract. Of course, like someone posted above, you don’t have to do any of this. You probably won’t get in trouble over one house. I just prefer to do things right if I can. I would have some serious questions as to why someone can’t get a mortgage. We’ve been selling off some property recently and it seems to me that anyone even remotely qualified can get a mortgage.
I appreciate the help/input. The renter is son of friends who we have know for some time. He’s young and has not established any real credit yet - he wants to buy but apparently lack of established credit is the issue. I haven’t gotten into the details, as it’s really not my business. We don’t want to do the contract for deed etc. either, its just been suggested and figured I would ask the magic eight ball.
When we rented ours (and bought another to live in) the bank said they did not care and the insurance company dropped our rate substantially.
We have used rentprep.com and some other websites for basic document templates and even an online service for running credit checks for around $25 a pop. It has always worked well for us.