The world of home rentals is a large and convoluted one. Landlords and tenants alike know that there are quite a few easy ways to get burnt, either by renting to the wrong people or renting from the wrong people.
Both instances carry various undesirable consequences and some lease agreements are a pain to get out of.
Then there is subletting (AKA subleasing), which means renting out a property you’re already renting from someone. This can be done for a variety of reasons, some of which are valid, and some are morally dubious, to say the least.
How does it work? As opposed to traditional rentals, where a person is renting a space directly from the landlord, subleasing is like another layer on top of the original lease agreement.
It’s quite tricky because the subletter is never actually dealing with the owner of the home, and as such, is not held responsible for any damage that they do for the property.
That is all on the original tenant, even if they weren’t the ones who’d done the deed.
Experienced real estate professionals advise against subletting as a way to make profit. It is a risky ordeal to get yourself into and can carry many unintended consequences.
If you’re looking to make some extra cash with a minimal amount of investment, you might want to look into the portable home market.
Getting and selling a mobile house quickly may even turn out to be cheaper than subletting in the long run.
Also, there are barely any legal risks associated with flipping motorhomes, which can’t be said about subleasing apartments.
If you’re thinking about subletting your home, read on to see what you need to think about before you make the final decision, so that you’re not left hanging when something goes awry:
When Should You Consider Subletting?
Generally speaking, subletting is not the most secure or profitable way to rent property, both for the sublessor and the subtenant.
The latter doesn’t have a 100% guarantee that they won’t get kicked out of the apartment before the end of their agreement, while the primary tenant risks losing their entire security deposit through no direct fault of their own since it is their name that is on the original lease contract.
There are certain cases, though, where subletting your home might actually be a good idea.
For instance, if you need to move out for a brief period of time without having to break your lease terms, you may want to rent the unit out to someone for a brief period of time, without having to sign a new lease when you get back.
If you’re a tenant who wants to stay in a certain area for a month or two, it will be easier for you to find a place that way, instead of dealing with landlords who would rather rent their property to permanent tenants.
If for whatever reason, you’re renting a rather spacious home and could use someone else to help with the rent payments and even build up your budget with a little bit of extra cash, it may be a smart move to bring in another tenant who would pay directly to you, rather than the landlord.
When Should You Avoid Subletting?
A tenant renting someone else’s property to sublessee is very rarely beneficial to the person who actually owns the home.
Your landlord may strongly object subletting and if they catch onto you renting their apartment to someone else, they might take legal action.
First of all, check your lease agreement very carefully to make sure that it does not prohibit such practices. If you’re in doubt, take it up with the landlord.
Never go behind their back if the conversation doesn’t go your way.
Sometimes, the opportunity to make extra money and paying lower rent can cloud your judgment.
If you don’t have enough time to thoroughly vet prospective subtenants, you shouldn’t sublet. You don’t want to bring in the first person who responded to your offer, as they may turn out to be problematic in the future.
If you’re not willing to take responsibility for your sub tenant’s actions in a home you’re also just a tenant in, you should not sublet the place.
Finally, there are cases when the landlord and the language of your lease agreement clearly prohibit the tenant from renting the property to others.
Don’t let yourself get swayed by thinking that you’re just going to rent to your best friend or family member and you’ll be able to get away with it.
Your sublessee might be the most well-behaved and responsible person in the world, but it won’t help you once the landlord catches onto your scheme.
You might lose your home in the best case, and end up in some serious legal trouble in the worst.
The Basics of a Sublease Agreement
If, after a thorough background check of your potential subtenant and informing the landlord about your decision, you decide to go through with it and rent the home to someone else, you should educate yourself on what a sublease agreement should contain.
First of all, it should outline the date of the start of the sublease period, as well as its end. The rent amount should also be up there, as well as any deposits you might be receiving.
It would be the best move to find a template of a sublease agreement and fill it out with the right information, such as the address of the property in question, complete personal details of both parties, and, of course, your original lease terms.
Finally, you should also consider including additional terms in there, regarding late fees or things like utilities and any rules you want your subtenant to obey.
The Bottom Line
Subletting is a risky procedure, and as such, it requires the right amount of precaution and good judgment.
It may be a great way to save some money on rent payments, but if you bring someone new in and they wreck your home, you’re the one who is going to answer for damages.
It can result in you ending up without a home.
Worse yet, if your potential future landlords perform a background check on you and find out that you have been kicked out of the last property you’ve rented, you might have a really hard time finding a new place to live.
Before committing yourself to sublet a home you don’t own to another person, consider all of the pros and cons of such an action, and only go through with it if you’re absolutely certain that it’s legal in your state and that your landlord is aware of the situation and allows it.
If you have any doubts regarding subletting, whether they’re regarding the potential subtenant or the legality of it, abandon this idea before you become the one who has to search for a new home to rent.