Considering Renting Your Investment Property Out By the Room?

This article by Chris Rolls from Rental Express provides great advice for renting your investment property out by the room.

Important factors to consider include:

• Security modifications
• furnishings
• electricity and water
• cleaning and maintenance
• wear and tear
• vacancy
• associated costs
  

Recommendations to make your investment work:

• proximity to public transport, CBD and university
• multiple living areas in relation to number of bedrooms
• installing hard wearing fixtures and fittings to reduce maintenance costs
• keep the end in mind.
  

Read article in full click here: Renting By the Room
Source: Your Investment Property

Q & A: I am moving into an existing share house and my new flatmate has asked for a bond. How can I make sure that I get this back?

As this is an existing share house your new flatmates would have already paid the bond when they moved into the property. In this situation flatmates pass bond money between themselves for any new tenants coming in and going out.

You will need to fill out a Change of Shared Bond Arrangement form (this form may be called something different in your state) and this is to be lodged with your State Authority (i.e. in Queensland it is the Residential Tenancies Authority). Usually your real estate agent will do this on your behalf. Be sure to keep a photocopy of this form for your own records.

If you choose to move, and your flatmate stays, you will have to fill out another one of these forms and get your flatmate to refund your bond or lodge a Refund of Rental Bond form (depending on your state this called something different). Bond money does not usually get refunded until the tenancy has ended. So if you are the only tenant moving out, usually you will be refunded your share of the bond by the other tenants, or by the new tenant moving in. For more information contact your real estate agent.

Q & A: I have an existing lease. Do I have to get permission before my new housemate can move in?

Yes. The owner of the property has the right to know and approve people living in their property. You must contact the lessor/agent/owner about any tenancy changes and you will have to get your new flatmate to complete a Rental Application Form before they move in.

It is essential that the lessor/agent/owner is notified each time tenancy changes occur. It is also in your best interest to add your new housemate to your existing lease for your own protection. So all tenants are responsible for payment of rent and payment of any compensation owned - if the Tenancy Agreement is breached.

If the lessor/agent/owner refuses to accept your housemate's application, you can apply to your State Authority's Dispute Resolution Service. Although keep in mind that most real estate agents will do a though review of the application and check any tenancy databases (ie. Tica) for any tenancy defaults - such as unpaid rent. So, if your new housemate's application has been refused there is probably a very good reason.

ADVICE: Questions to Ask when Interviewing Potential Housemates

Here are a few questions to help you when interviewing your potential housemate.

Background:

• Have you lived in share accommodation before?
  
• Why are you looking for a place to share?
  
• Why is the room available?
  
• How many people currently live at the property?
  
• What are your current living arrangements?

Occupation:

• Are you currently working? Full-time, part-time or casual?
  
• What is your occupation?
• What are your working hours?
  
• How long have you worked there?
  

Hobbies & Interests:

• What kind of music do you like?
  
• Do you have any hobbies or play sport?

Social Habits:

• Do you like to entertain or have friends over?
  
• Do you like to spend a lot of time at home or do you prefer to go out?
  
• Do you have a partner? If so, do you expect they will stay overnight regularly?

Domestic Chores & Hygiene:

• How do you believe the chores should be organised?
  
• Will there be a roster?
  
• Will you be prepared split domestic chores onto a roster?
  
• Would you consider yourself to be clean and tidy?

Smokers:

• Do you smoke? If so, do you smoke inside or out?

Pets:

• Do you have any pets?
  
• Are pets allowed on the lease?
  

Expenses:

• Does the rent cover expenses? If so, what exactly does it cover? (Expenses can include phone, water, internet, gas, and electricity)
  
• When are the bills due?
  
• How will we determine how the expenses get divided up?

Bond:

• How much is it?
  
• What are the terms and conditions?
• How do I get it back when I leave?
  

Rent:

• How much is it?
  
• When is it due?
• How is this to be paid?
  
• When was the last time the agent/landlord increased the rent?

Shopping Arrangements:

• Are the groceries bought separately?

Stability:

• How long do you intend to live here?
  
• How long have you lived here?

Availability:

• When are you available to move into?
• When will the room be available?
  
• When do you hope to make your decision?

References:

• Would you be able to provide references? (These could be from a previous flatmate, employer, current landlord or rental agency)
• Do you mind if we conduct a reference check?

Furniture:

• Will you be bringing any furniture? If so, what type?
  
• Is the room fully furnished?

Leases:

• Is there a lease?
  
• Are you willing to sign a lease?
  
• Or will it be sublet?
  
• How long is the lease for?
• When does it expire?
  
• Who is primarily responsible for it?

Have we missed some? Please post below.

ADVICE: How to Inform Unsuccessful Applicants

Once you have found your new housemate you also have that dreaded job of informing the losers. Here is a simple guide to mastering the art of painless rejection via email.

Please Note: Must be read with a sense of humor!

Once you have found your new housemate, it is advisable to notify those applicants that have been unsuccessful. Writing a rejection email is no easy feat. The message gives the applicant unwelcome news, and is therefore likely to disappoint the reader. To help we have outlined a few tips to make writing the rejection email a little less painless for both parties.

Open With a Positive Note: Open with a sentence that acknowledges the Share Accommodation Application, as this gives information on which both the writer and reader agree. This is a neutral opening paragraph. If the refusal is stated in the opening paragraph, the applicant may simply stop reading. As you want them understand your situation, use this paragraph to lead your reader to the main purpose of the letter. Examples include – “Thank you for applying to my Share Accommodation Ad,” “Your inquiry of my Share Accommodation Ad is appreciated…”

Explain the Situation: Present a positive explanation of the situation with courteous and clear reasons for the refusal. So that the reader has every chance of understanding your explanation and accepting your decision. It is unacceptable and discourteous to sound sarcastic, patronising, insulting or angry. Explain before you give the refusal. Lead the reader to the bad news tactfully.

Give the Refusal or Negative News: State the refusal clearly as the reader needs to know your decision. Write the message with conviction and confidence in a way so that the reader understands the reason for your refusal.

Close with a Positive Paragraph: Never place the refusal in the last sentence of the letter. Close in a neutral way with a sentence or paragraph that is courteous and pleasant. Avoid referring again to the bad news, apologising repeatedly or using clichés. Instead close the letter in a positive way.

Here is one we prepared earlier...

Example Rejection Email:

Hi Millie,

Just a quick note to thank you for your applying to my share accommodation advert on ziggie.com.au. Although the apartment seems great, I require accommodation close to public transport as don’t currently own a car. I have recently moved into a unit close to the train station so I am unable to accept. I appreciate your email and hope that you find a housemate soon.

Many Thanks,

Ziggie Green.

NEWS & ADVICE: How A Bad Roommate Can Ruin Your Credit Score

PLEASE NOTE: This news article is from the USA.

When you're fresh out of college and trying to swing rent on an entry-level salary, getting a roommate seems like the way to go. However, while roommates can save you money on rent, they can also damage your credit score if they forget to pay their half of the rent or volunteer to send in a payment for a utility bill in your name - and don't. So, if you find yourself looking for a roommate, keep this in mind: a bad roommate could mean bad credit for years to come.

Screen Roommates Carefully
Not only can a roommate harm you financially, but you may not want to live with a person who doesn't share your attitudes about cleaning, overnight guests or on-time payments. Ask questions about habits and request references from past roommates. Talk to your friends about what questions they asked their roommates, and combine this list with your own questions. Make sure these questions make the list.

• Have you ever been late on a rent, credit card or installment payment? Since your potential roommate may not have had an apartment before, you want to find other ways to gauge responsibility. Asking about credit card or car loan payments helps fill in the gaps. (For more check out Six Major Credit Card Mistakes.)
  
  
• What do you consider clean, and what is your cleaning routine? The words messy and clean mean different things to everyone. How many times have you walked into a friend's place that seems immaculate to you, but prompts your buddy to excuse the mess? You need details about this particular habit to decide if you’re a roommate match.
  
  
• What kind of guests do you plan on having over? Some people love to bring home new friends they meet at a party. If you only bring home people that you know well, you need to have a roommate who will uphold your rule.
  
  
• Do you keep in contact with your previous roommates? Staying chummy with a past roommate shouldn't be a requirement, but it will possibly tell you if your potential roommate has gotten along well with others. If the answer is "no", you want to ask what the reason is, so you can decide if the previous situation was petty or something that will bother you in the future.

Be Prepared to Pay the Full Rent
This doesn't mean you have to have tons of money available in a temporary rent paying situation, but you should have enough money that you could squeak by on a skeleton emergency budget for at least a month or two until you find a new roommate.

Especially if you are the only person on the lease, your roommate could leave at anytime - leaving you with the full rent. Even if you both are on the lease, our roommate could still leave the apartment or lose his or her job. While you find a new roommate, the rent doesn't get put on hold. (Do you have enough savings to cover the costs of unforeseen crises? We show you how to plan ahead in Build Yourself An Emergency Fund.)

Be Responsible for Every Bill in Your Name
If any bill's in your name, collect your roommate's share and then pay the bill yourself. The late pays and/or eventual collection notice could go against your credit rating. One way to avoid having to ask for the rent and utilities each month is to set an amount that your roommate will pay you each month that includes rent, electricity, cable, phone and other shared bills. If your roommate is forgetful of the set amount, have him or her set up a bill pay from his or her checking account to go to you.

Don't Move Out While Bills are Still Under Your Name
If you are gone for the summer, do not keep the electricity bill or any other bill in your name. Switch it - with your roommate's permission - to your roommate's name. If you move out, don't expect roommates to return cable boxes or anything else for you. You can get stuck with the tab for anything for which you are legally responsible. (Avoid punishing late fees and keep your credit score intact with these 10 tips, see Procrastinator's Guide To Bill Payment.)

If You Move Out, Take Your Name Off The Lease
If you don't take your name off the leas, you will still be responsible for the rent - whether you are living in the apartment or not. The problem with this situation is your apartment office may not let you remove your name before your lease is up. If your name can't be removed, stay put until the lease ends. However, if you are moving out because you are offered a job in another city, look into what the charge would be to break the lease so that your roommate can start a new lease in your apartment or another one on their own. (If you think it's time to test your wings and leave your parents' nest, read Are You Ready to Rent?)

The Bottom Line
Livingwith someone is a huge financial and emotional decision. Make sure that you screen potential roommates for how you’d live together, check into their payment habits and always verify bills are paid on time when they are in your name. Your credit history lasts a lifetime, and unless you find true love with your roomie, your living situation will most likely end as soon as you have the funds for a place of your own.(For additional tips on renting apartments, read 6 Tips For Renting An Apartment and Easy Ways To Cut Rental Costs.)

by Reyna Gobel

SOURCE: investopedia.com

ADVICE: How to Stay Safe When Looking for Share Accommodation

Here are a couple of tips that I have learnt from over the years...

Guard your personal details – we take your safety and security seriously at Ziggie. It is your choice what personal information you wish to disclose in your ad. Be cautious about what type of information you are revealing in your initial emails and your ad. Never provide your personal bank information or credit card details to others over the internet.

Set up a separate email account – It is recommended that you set up a free web based email account such as Gmail, Hotmail or Yahoo. This way you can feel free to gather information and screen applicants while feeling secure. And you are free to cancel the account at anytime.

Screen Applicants – Applications are emailed through our website, so they will not know what your email address until you choose to contact them. It is recommended that you screen applicants and only contact those you think would be suitable. Never feel obligated to meet everyone that applies.

Call first before meeting – You can tell a lot about people by talking to them on the phone. Before meeting consider talking on the phone first. Also use a mobile phone for added security.

Choose a safe place to meet - When interviewing potential flatmates we recommend that you meet in a safe public place and if possible take someone along with you when you first meet the person. Use your own form of transport and avoid remote areas. The local café is a good idea.

Take a friend or relative along - Bringing along a friend or relative to interview potential flatmates, will not only make you feel safe and comfortable, but will also give you a second opinion. If you do not have a friend with you, then ensure that you tell someone exactly where you are going, what you are doing, when you can be expected back and provide a number for them to get in contact with you if need be. The same goes if you are inviting a potential flatmate over to inspect your home. Also ask to see personal identification before letting them in.

Trust your instincts - If you feel uncomfortable or uncertain at any time, then show them the door or if you are meeting them at a public location simply excuse yourself and leave. Always trust your instincts; it is better to be safe then sorry.

ADVICE: 10 Tips for Selecting the Perfect Housemate

Most people I have talked to have some kind of share house horror story or better yet – stories! I certainly have my fair share. So I thought I would pass on a bit of wisdom that I have gathered over the years.

My first tip is to imitate the experts! By this I mean treat it like you are interviewing a potential employee. By using HR strategies you too can find the perfect housemate :) .

Please note: although at the outset we endeavored to write a serious helpful guide to finding the perfect housemate, further editing has found a fair amount of silliness added to the mix. Therefore, through off your serious shoes and put on your sense of humor hat...you know what we mean.

Tip # 1: Do Your Research and Be Prepared
Before you do any interviewing or place an ad you should develop a list of qualities and requirements that you are seeking. Use this to develop a list of questions to ask your potential candidates. This helps to avoid any impulse decisions and any mistakes you may later regret. For tips go to: Questions to Ask When Interviewing a New Housemate.

Tip # 2: Sourcing the Right Candidates
Now that you know your requirements the next step is to put this into an ad that will attract the right person. Writing a really good ad outlines what you are looking for and helps others eliminate themselves if they are not suitable. For tips go to: Write a Share Accommodation Advert that Gets Enquiries.

Tip # 3: Assessing Candidates - So, tell me a little bit about yourself…
First things first, you need to suck out as much information about them as you possibly can. The best thing you can do is have your list of questions with you and fire away. What is your occupation (ie. Can they pay the rent?). What do you like to do on weekends (ie. Are you going to spend all weekend at: The Lounge?). What kind of music do you like to listen to (ie. Am I going to come home to death/suicidal tunes?). Alternatively, you could get them to complete an extensive psychometric questionnaire administered by a chimp. That might be going a little too far. But you get the idea. Get creative!

Tip # 4: Will They Fit into the Team?
After extracting as much information as you can from your potential candidate, now is the time to match this to you, your current housemates and your list of requirements. Do you share anything in common? Age, gender, occupation, sports, personality, standards, values etc. I have found that the most important characteristic has always been personality (i.e. can you stand living under the same roof with this person).

Tip # 5: Experience & Training
This tip probably belongs under Tip # 3 – but hey I need 10 tips and I like this heading. What is their opinion on cleaning? Do they consider themselves clean and tidy?

Real Life Experience # 1: Although it is quite common to find people that are a bit untidy, keep in mind that there are a few people whom swing the other way – a little too far the other way. In my early years of share housing, a girl I flatted with had similar housekeeping skills to the husband in “Sleeping with the Enemy.” God forbid you departed the house in a disorderly manner, only to return to find everything back in perfect (eerie like) order. Those people exist, so beware and take care!

Tip # 6: Outside Interests
Do they have a boyfriend or girlfriend? You may be getting two for the price of one. Make sure you find out if they have a boyfriend or girlfriend and if they stay overnight regularly. Also determine what kind of people they associate with and if you would trust them in your home around your personal belongings.

Tip # 7: Past History - Determine their background.
Why are they looking for share accommodation? Why is the room available? Have they ever been evicted? How long have they lived at the property? This will determine their stability. You want to ask these questions before they move in – maybe over the phone as it is a bit easier. Alternatively, you could take them to the local for a few quite ones. Wait until they are totally plastered and fire away with the hard hitting questions. All a matter of ethics I guess…and no, I haven’t tried this myself.

Real Life Experience # 2: While watching television one night a former housemate casually informed me that he had been a former guest of the state (jail if you didn’t get it). Not exactly a conversation starter. But this did teach me the very important lesson of checking out their past history. And just in case you are wondering - nothing bad happened.

Tip # 8: Making the Decision
Always do reference checks and never make a decision straight away. Sleep on it and then contact them the next day. Ask for references from past housemates, employers, and previous rental references. Get a second opinion. Ask your friends and family to meet them first before they move in. And, always trust your instincts.

Tip # 9: Orientation – How to Lay the Groundwork for Success
Before they move in make sure you discuss rent, expenses, bonds and leases at the beginning. When they move in show them around and introduce them to the new team. They’ll appreciate it if finding the bathroom isn’t the biggest accomplishment of their second day. Discuss the household rules, cleaning roster (if you have one), behavior you will not tolerate etc. If you let them know in the beginning this avoids problems and disputes later on down the track.

Tip # 10: Have fun!
Not all of share housing is dirty dishes and listening to bad music. You do occasionally meet some good people.

As always, enjoy!

If there is something you think we have missed, be sure to let us know so we can share your questions. Email us at feedback@ziggie.com.au or go to our feedback page.