HELP!! Do I let my tenants have a say in who moves in?

Question

Hi Bigger Pockets!

I'm in need of advice. Should I let my tenants have a say in who moves into my short term rental unit?

I exclusively rent to travel medical professionals for a short term stay of 3 months. I have two rooms rented and recently just rented out the third room. I contacted my current tenants and informed them of the third rental. I have one tenant who is very unhappy and indicated she does not want a third room mate and only rented my unit because she was under the impression that there would only be her and another room mate. Her future move in date is May 12th.

Anyone have advice on what I should do?

The two tenants isn't enough give me a positive return. I would be operating at -$192. Do I not rent to the third person, or do I cancel the unhappy tenant?

Erin Church · Answer

I would not operate in the negative to keep her happy since she hasn't moved in yet. I would do one of two things:
1. Let her rent the 3rd bedroom at a slightly reduced rate that still gets you well into the black.
2. Let her out of the lease as it won't be worth the headache (or losing money).

It sounds odd that you're renting out by the room and she thought there would be an empty bedroom though. I'm guessing she would have to share a bathroom and that is what she was unhappy about. As a side note, make sure your posting is clear that full occupancy is 3 individuals (or give more details if you allow couples, kids, pets, etc).

Good luck! :)

Hadiya Coppedge · Answer

@Jonathan R McLaughlin

You are absolutely right. At the time I wrote the ad, I thought it was implied. I've taken you and @Erin Church's advice and edited my ad to state full occupancy is all three rooms rented.

@Colleen F. I'm honestly not sure. I did talk to her on the phone and explained the business side of renting. That I would operate in the negative bc her rent (which I discounted because she has to leave early bc the entire unit will be rented) and I would release her from her lease if she wanted. In the end, she decided to stay and I took @Jonathan R McLaughlin's advice and made a deal that makes us both happy.

Thank you everyone for all your advice and support!

Rick Albert · Answer

I remember when I was in college I was renting a room and the landlord wanted to rent the fourth bedroom. He asked if that was okay and I asked if I would get a discount on the rent. He said no and so I said I do have a problem with it. That now a third person I have to share a bathroom, kitchen, and common areas with that doesn't affect the landlord (he was living in the house as well but he had the primary suite, so he had his own bathroom and his life wouldn't be affected other than more cash in hand).

I recommend making it clear in the lease that all rooms are being rented out separately and that is the intention. Depending on local laws, I would argue that the tenant has rights to push back because she signed a lease with written expectations, not verbal. As mentioned by others, I would either offer a reduced rent or having her end the lease. It becomes a he-said, she-said battle unless it is in writing.

Dave Spooner · Answer

@Hadiya Coppedge I agree with Erin and Steven on making sure it is clear that you are looking to fill those three rooms. You could also incentivize her and tell her if she finds someone for you to give her a certain discount for a month. Best of luck!

Stephanie Spencer-Boldon · Answer

Tenants cannot dictate to you what you should/ought to do. In these legal situations nothing can be implied all has to be spelled out. If she's emphatic on not wanting to be in a place with three tenants, then offer her to opportunity to pay full price for the additional space. Why should you take the lose?

Jonathan R McLaughlin · Answer

congrats on making it work!

Mike Dymski · Answer

Not sure what each room rents for but I would think two rooms should at least cover the mortgage...and then need to cover all the non-mortgage costs including management (you are someone else needs to get paid for the work), medium term vacancy rates, repairs, cap ex, etc. and have profit on top of the total cost.

Theresa Harris · Answer

If she knew there were 3 rooms for rent, then no.  Tell her she's welcome to rent the third room herself.  You can also tell her you will let her out of the lease.

Ned J. · Answer

Apologize for the miscommunication and offer to let her out of her agreement, no strings attached. Then modify your advertisement to make it perfectly clear about the situation

The alternative is to leave it as is..... leave the room open for the 3 months..... eat the loss and consider it the cost of a lesson..... but IMO there is no need to pay that cost and I would not take this approach. You made an error, but one that can easily be corrected before anyone is out of $$ or feeling like they got a "bait and switch".

Steven Foster Wilson · Answer

Another helpful tip would be to share a little about the two existing tenants, that may make the new tenant feel a little more comfortable.

HELP!! Do I let my tenants have a say in who moves in?

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