A reader recently asked me to talk about the challenges of renting out the guest house. So far, it’s been a mixed bag mainly because, while the tenant is great, but we keep finding issues with the rental.
My best guess is that Marc and Nadine just didn’t complain about things because they knew what a good deal they were getting. So things got out of hand.
The first challenge was setting a price. The place is tiny (420 square feet) and has “quirks” (like no closet). So I wanted to set the price fairly low in order to get someone who would overlook those factors, plus the tiny bathroom and bedroom.
I should have done more price comparisons. Apparently, even studios are renting out for $600+ (emphasis on the “plus”).
So $500 including utilities was probably too low. I think I could easily have gotten $550 maybe even $600. And that’s born out by the 30ish responses I got overnight to my Craigslist ad. (And yes, I highly recommend Craigslist first. You can always switch to a paid ad later if you don’t get any good leads.)
I decided to ask for a $300 deposit and a $200 pet deposit. But I ended up not getting the pet deposit because the tenant’s dog is an emotional support animal, and legally you can’t charge for those. At least, that’s the policy of apartment buildings, so that’s what I went by.
Finding a tenant
Next challenge: choosing a tenant.
Some were complete no-gos. One guy wanted to move in with his fiancée and two kids. And yes, I put that it was 420 square feet in the ad.
A different query was from a single mother and two kids. Again, I was very clear about the square footage.
Another had the NRA in his email signature, and I didn’t want any guns on my property. (Sorry, Pop-Pop, I know I’m letting you down there. But I’d be very nervous if I had to evict him or just enforce anything in the lease.)
Honestly, I was initially skeptical about the current tenant. First because she warned me that she didn’t have good credit. She allayed that worry by offering to have her mother co-sign.
But the other potential issue was that she has a small dog, and what with Marc and Nadine’s two Pomeranians, I’d had enough yappy little dogs to last a lifetime.
Then she said that she was going to treat the bedroom as an art room and use the main section as a studio. Which made me favor her.
My bedroom abuts the guest house’s bedroom. Which can, not to put too fine a point on it, cause problems. So her not really using the bedroom was very appealing.
Most importantly, she seemed genuinely delighted with the space. I wanted someone who was happy in the guest house, not just putting up with it. That would make it more likely the person would stay over the long-term.
So I decided to at least give her a shot.
The third challenge was figuring out how to check her out. I wanted to know who I was letting onto my property.
I went online and did some research. I also went into the FinCon forum and asked other landlords for their suggestions.
Based on my own research, I liked RentPrep and one of the landlords in the forum said he used it. There was one other company, the name of which eludes me, that two landlords used. But it seemed set up more for larger properties, so I went with RentPrep.
Really, you can just google “tenant background check” and get plenty of options.
RentPrep is kind of cool because it can have the would-be tenant pay the company directly for the background check. You just input the email address, and it sends them the application form and has them pay. That way, you don’t have to collect the fee and worry about a check bouncing.
The background checks came back within two days. I think it was actually done the next day, but don’t quote me on that.
Sure enough, her credit wasn’t great, but it was medical debt. Because of my own dealings with Tim’s sometimes substantial medical bills, I completely understand getting behind on that. Besides, she easily made enough money to cover rent. And her mom’s credit was in the 700s. That was good enough for me.
The next roadblock was a lease. I wanted everything completely official, which meant a lease, which meant actually finding a lease form.
Another quick Web search landed me on eForms. It had a lease that was incredibly easy to fill out.
The site basically held my hand through the whole process, prompting me with questions about the length of the lease,* the name of the tenant, the rate of rent, fines for late payment, and all sorts of things I hadn’t thought of, like how long a guest could stay in the unit.
The system then plugged those values into the lease in the appropriate spots, and I just had to print out copies.
I also had to print a (very long) lead paint disclosure since the structure was made before lead paint went out of circulation. Legally, you have to give them one of those, so don’t skip it!
The best part is that eForms has a seven-day trial, so you can get your lease form then cancel, thereby getting it for free. I had already used my trial period getting a will written up, so I had to pay the $15 monthly fee. Still, I think that was a pretty good price overall.
I’m sure there are free forms out there somewhere (though I did look and didn’t find any), but it was nice to have a guide to filling out the document.
*I chose six months. I figured that was long enough to get into a groove and see how we liked each other but short enough not to be too horrible if it wasn’t working out. The lease converts to month-to-month after the initial term is up.
The tenant wasn’t ready to move in right away. We settled on the end of the month, but then her friends she was staying with and giving rent to demanded a 30-day notice. Some friends.
So we agreed to the 15th of the month instead. That meant a month’s worth of rent that I didn’t get, since the previous tenants (from a short-term rental I’d had) left on the 15th of the prior month.
Thankfully, I don’t need the funds to survive financially. If you do, take availability into consideration when choosing a tenant — and ask if they’ve given notice at their current place.
This has been the main problem with renting out the space.
Upon moving in, she found mold. I wondered why the previous tenants (the ones who were there for three months) kept the windows and door open. I thought it was just to avoid using the A/C, which I appreciated. Now I think the mold smell was a problem. Why they didn’t mention it is beyond me.
The signs were there. For example, we’d noticed an odor when I was showing the place but thought it was just a little musty from being closed up. Yeah, not so much.
She scrubbed the mold off the wall, bless her heart, but there was no saving the bottom board under the sink, which was riddled with mold from a dripping pipe. The board had to be replaced, to the tune of $248.
Even after that, though, the tenant still smelled mold.
I didn’t, but just to be sure I called a mold inspector to come out and take a look. He didn’t find anything either. Neither he nor I smelled anything out of the ordinary. So she got an air filter device and that seems to have taken care of whatever she was smelling.
I never received a bill for the inspection — maybe because it was such a cursory look? — so I dodged a bullet there. It would have been around $150.
Then the kitchen faucet was loose and needed replacing, along with a section of pipe that was leaking underneath the sink.
I might have been able to do myself, but Mom and I had already tried to fix the pipe ourselves with some plumbers tape — apparently to no avail. I was skeptical that I could fix the pipe the second time around. Plus I really didn’t want to fuss with replacing a faucet, which I’ve never done.
So I took the easy way out and got a plumber out there. That was $212 after the cost of the faucet was factored in.
Plus, I told the tenant to take $50 off her next month’s rent to compensate for all the hassle.
Still more repairs
Then the shower handles started to leak water. A guy I’ve been seeing used to be a plumber. He was kind enough to come take a look. It turns out the stem valves just needed tightening.
Another $120+ bullet dodged.
He also tightened the toilet bolts, which were loose and causing the toilet to be shaky. (That I would’ve figured out/done myself, along with the caulk he put in. But bless him for doing it for me.)
And yet more repairs
We had a quiet month. Then there was a storm and water came in under the doorway to the point that the towels the tenant put down were soaked.
I called the place that installed the door. They had to rehang it, install a piece of convex metal at the bottom of the door (to repel rain), and plane down the stoop, which, as it turned out, slanted inward causing rain to pool right by the door.
The door repairs were free, since they were fixing a mistake. But the planing down of the stoop was around $280. I got off light: They said it could be as much as $600, depending on how long it took.
Unfortunately, dust from the project got all over the guest house’s interior. The tenant had to wipe down most of the surfaces and wash her bedding. I apologized profusely.
Would you believe it? More repairs
Then about two weeks later the A/C started to rattle and some plastic pieces fell out of the unit. It turned out a wheel had broken and needed replacing. Unfortunately, it wasn’t a part the HVAC company carried. So they had to email the manufacturer to see if that was even a part that was sold.
It took a few days for the manufacturer to get back to them to confirm that replacement wheels were indeed for sale. Then they had to order the part.
At this point, my tenant had been staying with her mom for four days already. Because you can’t survive August in Phoenix without A/C. So I asked the HVAC company to have the part overnighted, and I’d pay the fee.
The wheel finally came in, and the tenant got settled back in after a “mere” six days of being displaced. I told her to take $200 off the rent for the tribulations of being displaced and the stoop dust getting everywhere.
Strangely, the A/C guy said that the repair was covered, even the labor, since the part was under warranty. I think this was a mistake on his part, but I wasn’t about to argue.
Almost more repairs
I ended up having to call the HVAC company out twice more for a rattling sound that seemed to be getting worse.
We finally figured out that it was the a combination of the plastic cover bumping up against the wall when it was running and the condenser switching on to empty collected moisture.
At least nothing else was broken. And the visits were covered under a plan I have with the company.
All in all
It’s been a roller coaster.
Luckily, the tenant is just happy that I’m taking care of the problems in such a timely manner. She’s even apologized for finding so many problems. I keep apologizing for her having to deal with all of these issues.
And despite the hassle, I’ve gotten more in rent than I’ve paid out in repairs. Well, not including the $1,500 in new windows I put in before she moved in.
Besides, she’s a good tenant.
She’s quiet but friendly. She pays part of her rent with each paycheck so that I have the $500 well before the 1st of the month. She plans to stay forever if I’ll have her (her words). And perhaps best of all, her dog barely barks.
I figure I have plenty of months in the future to recoup these repair/window costs. So overall, I’d say it’s been worth it.
Have you ever been a landlord? Did you have a Lemony Snicket-level series of unfortunate events?