Hello Everyone, Sunny with Synergy Real Estate and Property Management here in Bakersfield. So today we’re going to be going over “house hacking”. House hacking is a really interesting term that’s being used right now that basically is where you purchase a home you live in one bedroom and rent out the other bedrooms, house hacking, also called co tenancy in a more professional manner.
Basically what we’re going to be looking at is how you can do this, and avoid some of the kind of pitfalls that we see on the front. Let’s just say that we’re purchasing a property, we move into this property that is a 3 bedroom home. We have the master bedroom so we have two other bedrooms that we can rent out.
We are near school so we decided okay instead of renting out, you know the house as a whole. I am going to move in. I am going to rent out each and every bedroom, and we’ll have these separate tenants. One of the main things that we can see already is well, first off, do you know who’s living with you. We want to make sure that even though these people are going to be renting rooms. It may not be as legally binding as normal kinds of leases concerned or we may not treat it that way, it is still legally binding.
We may not treat it that way. We still need to treat this as a professional, kind of tenancy, right, we are still the landlord that will still be our tenant. And because of that we do want to make sure that we check in on who these people are. Checking their credit, we want to check their incomes, we want to check their references. You would want to know who they are, especially because they’ll be living right next to you in the same house. So definitely something that we recommend right and that can be just. Looking for someone to do the leasing or finding a management company that will do your leasing for you.
Even though its a single room, there still needs to be rental terms
Now let’s say we have checked into these people, these people do check out. Well, now we have two other people in this home so there’s three of us, but there are common areas we’re renting a bedroom right and there are common areas of the home. One of the main things that we want to look at is we still do want to have a lease in place. Which tells them you know you can’t do this you cannot do this if you do this we will kick you out here essentially the rules. Do you want to have a lease in place with these people again. It may not seem like you need to be as stringent on, you know, tenants that are living in the same property as you know where they live, you see them every day.
If they try to skip out on land, it’s a little difficult to say, Hey I didn’t know you were there, you know, but we do want to keep this professional so again it’s something that we can provide if you’re looking to just have this person I’d like to run their credit. I’d like to know about them, I’d like to have a lease agreement together for our property, something we can help you with.
You know, once we have those basic kinds of, who are you, we have those basic ground rules. You know the other problems that we do see are well if you have guests coming over. What is that policy so we want to make sure that we have a guest policy right? You as the owner of the property, you do have a significant other and they come over and you guys sit out in the living room and you’re watching TV. And one of the other tenants comes in and they want to also watch TV, was that something that you want is something where they want to be able to control the TV. A certain amount of time is it something where they want to be able to have their people over as well. Can we treat this as a true common area or should there be hours in which people can use it or not?
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So these are all questions that need to be answered and it really works out when you have it all noted down on paper. You can create a kind of a code tenancy form if you will for these tenants and have extra rules on okay well this is how we are going to XYZ meaning if you want to have guests over. It’s going to be as time or we’re going to allow X days right without having them kind of have to leave.
If you want to, you know watch TV in the main room and keep it really loud. We are going to have these noise hours right, things like that are just things you want to think ahead about and make sure that you’re taking into account. When you are leasing these properties out to other people again these are tenants right, it may not seem like it because they’re in the bedroom next door that we need to be as kind of legally binding as we are talking about but it definitely does help for those situations that you do not see coming, right.
That is definitely something that we would recommend. You want to have a CO tenancy kind of thought process here so any rules that you would like them to abide by. If they have any rules that they would like you to abide by, you know, these are things that we want to talk about. We want to see how we can make it work, and kind of put together as much as possible before we get into the actual agreement to avoid any problems moving forward, right. These are just a couple of things that we were looking at you know obviously there are many more if you have any other questions please do feel free to ask us we’ll be happy to help you out.
As far as Synergy’s concerned, commercial and investment real estate if you’re looking for property. Synergy does do analysis. We will help you find the property, help you close the property, we have a property management company to help you manage those properties as well. Along with all of these we also have a construction company to help you fix those properties as well. Also, we can use each one of those companies in a separate fashion. Or we can put them all together and create a one stop shop for you, whichever works best for you.
Sanjeev (Sunny) Advani
Office Lic 02012941