First-time House Hacker - many questions!

[Ryan Casey]

Hey everyone!

So I am closing on my first property, which will be a house hack, on 9/13 and will be renting out to two buddies. I just had a few questions in regards to the lease agreement and some details related to this. Any and all input is appreciated - thanks in advance! Here are the questions:

- Given the anticipated close is on Thursday, 9/13, we had planned on starting the move-in process that weekend. Would you make 9/13 the official start date of the lease? Or would you put it as the following Monday or another date altogether?

- Also, I was leaning towards a standard residential 1-year lease. Is there any reason you would not do this or do a month-to-month lease instead? In the case of a 1-year lease, would the end date be exactly one year from the start date, or would you set it as the last day of that month a year from the start date to make the next cycle begin evenly on the 1st of the following month? (i.e. 8/31/19 or 9/30/19 end date, then 9/1/19 or 10/1/19 start date the following year). Long story short - what ideal start/end dates would you recommend?

- Given the two tenants are my close friends (I do trust that they will be responsible and pay rent, respect the property etc..), would you recommend still doing a security deposit? Or in the case of renting to close friends do you feel this is unnecessary? If a security deposit is still recommended, is there a standard amount or range I should request?

- Do you typically ask for first and/or last month's rent at the signing of the lease? Or any other particular payments up front?

- I have gone on the township's website of the neighborhood of the property and printed all of the required rental unit and landlord forms and paperwork. Are there any other specific forms, licenses, agreements or procedures I must complete or carry out prior to renting this property? The property is located in Palmyra, New Jersey (Burlington County) - are there any state-specific requirements that NJ landlords must meet as well? I understand there must be an inspection and will be having this carried out. Anything else though? 

- As a landlord, will I need any specific type of personal insurance for this? Or just standard homeowner's insurance?

Feel like I am overthinking and overcomplicating things, but just don't want to miss any small details! Thank you again in advance for taking the time to read this and give any input or information - I truly appreciate it!

-Ryan

[Allison Stewart]

1. I wouldn't put their move in date on the same date as the closing. I would put it the next day. 

2. We didn't chose to do a 1-year lease with our tenants for the first lease because they were moving in in the fall and if they chose to move out at the end of the lease term, we wanted it to be during the time when it was easy to find other renters (for our market, that's the spring). So their initial lease was 8 months so the end date was in the spring. You can write the lease term for however long you are comfortable with. Our renewal with our tenants was for a standard 12 months. I like 12 months - but our tenants are great so it's basically a guarantee for us that they won't leave. If you're not so sure about how good of tenants your friends will be, maybe give them a shorter lease to start. 

3. Yes. This is a business. If they are responsible, then they get their security deposit back. No big deal. We request 1 month's rent for security. 

4. First month's rent + security deposit + any fees (pet fees, etc). But this can vary by area. 

5. Check with a realtor or lawyer. 

6. Check with a realtor or lawyer.

7. An umbrella liability insurance policy ($1M) isn't a bad idea. You don't NEED it, but it does offer some protection for liability. Your renters should carry their own renter policy - this should be a condition of the lease. Your homeowner's insurance won't cover your renters. 

Best advice? Get a realtor to do the initial lease - even if it means you have to pay them. They know how to do them well.