When you book a hotel reservation online the representative will ask for single, double, or multiple occupancy and charge accordingly. It’s the same idea when you rent out your property to prospective tenants. Those who plan to ren...
When you book a hotel reservation online the representative will ask for single, double, or multiple occupancy and charge accordingly. It’s the same idea when you rent out your property to prospective tenants. Those who plan to rent your property are written in the lease predominantly for liability purposes. Those who plan to stay in your property who are not on the lease are considered guests.
Sometimes your tenants will abuse the lease by having multiple guests stay for long durations of time. Of course having the girlfriend stay over for a couple nights a week or the parents visit for a couple weeks at a time is fine. However, where does one draw the line? Although restricting guests and their duration of stay is almost impossible to enforce, there has to be some language and understanding in the lease to prevent a rental from turning into a boarding house.
During my latest tenant search, I almost accepted two guys who would have fully taken advantage of the lease by having two to four guests all throughout the year. Here’s how things played out.
PREVENTING GUESTS FROM OVERSTAYING THEIR WELCOME
My main rental is a two bedroom, two bathroom condo with parking in a nice part of town. I decided to raise the asking price by 12% to take advantage of current tightness in the market. The realistic range I could charge was between $3,500 to $3,800 based on my market research and I decided to shoot for the top.
Demand was strong at $3,800 but several prospects who showed tremendous interest flaked out in the end. Then a software engineer who just relocated to Google’s San Francisco campus from Mountain View paid me a visit. He was a nice guy who made a low six figure income. His roommate would be arriving later next month from Bangalore, India for an internal job transfer at Google on an L1 visa.
Before I Skyped with the prospective tenant from Bangalore, his roommate was so eager to secure my place that he offered to come by my house that evening and leave the $6,000 rental deposit with me. I agreed and told him I would not cash his deposit until the interview was complete and we all signed the lease. During the tail end of his visit, he mentioned that his father would be paying him a visit next month for a couple weeks. Not a problem.
Then I politely asked what about his mother, afraid that he might say they were divorced or worse, was deceased. He responded, “My mother is coming too, and will stay with me for one month. Is that OK?”
I was surprised by the duration of her stay and asked him, “Where would she stay?” given he would have a roommate.
He politely responded, “In my room, with me of course.”
I realize it’s common for 20-something year olds to co-habitate with their parents until they build up their financial reserves, but I have never heard of living in the same room with your mother for a month if you are making a six figure income. Why not just put your parents up in an inexpensive motel for a month if you’re making $10,000 a month in gross income? Besides, my apartment isn’t big enough for four adults.
My prospective tenant is either a big time mama’s boy, which may be good because when mama is in the house, there won’t be raging parties that will disturb the neighbors. Or, my prospective tenant might be uncertain about his financial situation or is super frugal. He asked me if I could put in a clause that said I would not raise the rent for two years for example. If you’re constantly going to have your parents stay over, at least get your own place or a place with one extra bedroom. Don’t parents deserve better?
As a grown adult, I’m not sure if I could voluntarily live in the same room with either parent for one week, let alone a month. Could you? I chalked the situation up to cultural differences as Indians have a very strong family bond. My tenant then mentioned that he’d probably have his five brothers and