Ladies & Gents: Find Success Using Space You Already Have
Maybe you’ve been thinking about it for years. After all – that empty living space over the garage, what the city calls an “accessory dwelling unit” or ADU, already has a bathroom and there’s room up there to install a kitchenette. Wouldn’t it make a pretty nice space for a college student or a retiree? And if you could rent it for a fair price that helps you with your mortgage or property taxes, that would be pretty great, too. Everyone wins, right?
Portland can be a very difficult place to find a rental and that space isn’t being used, so… why not?
Getting your version of a landlord or landlady business up and running might look good on paper and sound like a win for you and your prospective tenant, but there are many pitfalls in property management that you may not already be aware of.
If you’re not a seasoned landlady already, then the process of preparing your ADU for rent, finding renters and screening them, making sure that your renting process is in compliance with all your local, state, and federal legal requirements can certainly be daunting at the outset. Read on for an abridged guide to becoming a rock-star Portland land lady or lord that just may put your mind at ease.
Getting the Rental Unit Ready and Up to Code
Getting a rental property prepared to go on to the market can be a lot of work. You’ll need to insure that all fixtures, appliances, plumbing, and electrical are working and up to code. You’ll also need to make sure that your building’s construction is up to code, as well.
You can hire a handyperson or a licensed contractor to help you with the ins and outs of rental preparation, but make sure that you get one who is licensed and insured, and that they have prior experience (and references) with rental preparation.
They should know the appropriate codes so that you don’t have to. You’ll need to make sure that the work is permitted and approved by the City of Portland if you want to create a legal dwelling unit.
Finding Your Own Renters vs. Using a Property Management Company
Maybe you’re lucky enough to know someone nice and trustworthy who will rent the ADU from you. If you don’t, then you’re most likely going to have to advertise to find tenants, and then go through the process of screening them yourself.
But using free listing sites like Craigslist and paid sites like the online version of what used to be the Oregonian’s classified ads can bring some unsavory business to your door. Then there’s the whole legality of renter screening, and all the paperwork that you need to keep on file to insure that you’re in compliance with the law. Sometimes the best way to find someone is through Facebook friends or a Facebook group. Word of Mouth can often also be a good way to go.
Doing Your Homework
How much should you charge? How much of a deposit is reasonable to ask for? What are the forms that you’ll need? What do you have to repair and when? And what are your tenant’s repair responsibilities? You may have questions, oh so many questions!
The truth is, it’s all in the Oregon State Constitution. You can charge whatever you want for your ADU, and rent control is currently illegal in this state. That said, what you can rent a mother-in-law cottage for in Irvington and what you can get for one out in Lents may vary greatly.
Do your homework to make sure that you’re not pricing yourself out of the market, taking advantage of every online resource available, from Airbnb to Craig’s List and other similar or comparable apartments that may be currently for rent in your neighborhood. You can also check out Rentometer or Portland Walk Score, two websites that can help you determine the best most realistic price for your space.
Also, keep in mind that these days, first month’s rent, last month’s rent, and a security deposit of up to a month’s rent is becoming increasingly the norm for move-in fees, should you choose to forego the short-term rental route like Airbnb, and opt for longer-term tenants. You can also charge prospective applicants an application fee (usually to offset the costs of checking credit and references).
There are many laws that affect how you screen applicants, and what information you actually need to give them so make sure to get your ducks in a row before taking the plunge. Check out the Oregon Bar Association website to gather more information or take a class through the City of Portland that can provide prospective landladies & lords with all the information you need to get up to speed on all of the business and legal aspects of renting.
Or, you can always give up a percentage of the rent to have a property management company assume the headaches for you.
Not Your Grandmother’s Boarding House
This isn’t the nineteen-thirties and renting your ADU doesn’t have to be anywhere near the hassle that landlords and landladies of past generations had to endure. Remember (no matter how hard they may pressure you!), you will not be expected to cook and clean for your prospective tenants. It really is as simple (or as complicated – depending on your perspective) as owning a single-unit apartment building. Good luck out there!