You have probably heard the term subletting before. But do you have a full comprehension of its meaning and implications? Moreover, is subletting the right move for you and what are the pros and cons of subletting?
What is subletting?
Simply put, subletting refers to a situation where a tenant rents out their rental property to another person while their name is still on the lease. Under this arrangement the original tenant is referred to as the sublessor. The new tenant under a sublet or sublease contract is known as the sublessee. It is important to keep in mind that subletting distinctly differs from a roommate arrangement. With a sublet, only the original tenant’s name appears on the lease agreement. While, in a roommate situation, all the tenants are named on the lease.
Essential steps to subletting a property
There are numerous reasons that might prompt a tenant to sublet their rental property. If you know what you are doing then your sublet experience can be easy and pain-free. Here is everything that you need to know about subletting your property.
Make sure you are allowed to sublet
Before you rush to sublet your property, it is vital to ascertain if you are permitted by the landlord to sublet the property. In addition, there are various laws regarding subletting that you need to have a firm grasp of. As such, it is imperative to ensure that you are legally permitted to sublet. You can start by going through your lease to determine if there is any mention of subletting or subtenants. In the event that your landlord allows you to sublet then it is important to get this confirmation in writing.
Check with your renter’s insurance company
Needless to say, renter’s insurance is of paramount importance. Renter’s insurance covers your belongings in the event of a theft. Moreover, renter’s insurance limits your liability if someone is injured in your home. With this in mind, check with your renter’s insurance company to determine if your coverage extends to subtenants. In the event that your insurance provider does not provide cover for subtenants then you may consider removing your belongings from the property. It is also important to remember that any damage to the property from your subtenant will repaired from your security deposit.
Market your sublet
Now it is time to put on your thinking cap and get your creative juices flowing. You need to come up with an effective marketing campaigner that will help you get the right subtenant in the shortest possible time. Be sure to include clear and quality photographs, a list of amenities and the rent cost in your listing. To add to your selling points, you can highlight the key features and attractions in the area. Create a separate email address for this exercise and never put your phone number online.
Screen potential subtenants
Subject all potential subtenants to thorough and complete background checks. Evaluate everything from their rental history to their financial status. You are responsible for the subtenant you get so it is important to get the right subtenant. Keep in mind that it is still your name on the lease agreement so ensure that your security deposit stays intact.
Sign a sublet agreement
When you have identified and settled on a good subtenant it is essential to have them sign a sublet agreement. This will help you avoid headaches in the future.
The pros of subletting
- One of the biggest benefits of subletting is that it helps you avoid breaking your lease agreement. Needless to say, breaking your lease early can have a negative impact on your rental history and can cost you money in the long run.
- If you have to move from the property for any number of reasons, it is important to know that you are still required to pay rent. Paying rent for a property you are not living in is a huge expense and waste of money.
- Subletting your property accords you the freedom to travel without feeling tied down.
The cons of subletting
- To start with, it is difficult to find good tenants and therefore chances are you will come a tenant that will cause you issues. A bad tenant can cost you your security deposit and tarnish your rental history.
- Secondly, if your sublet goes wrong, which it sometimes does, then you risk damaging your reputation.
- Lastly, your subtenant can also experience the same life changes as you. This means you will go back to paying rent for a property you are not living in.
