Tenant wants to move in friend and her children

[Sean Heard]

Hello BiggerPockets!

I'm fairly new to the BP community and very new to real estate investing. I purchased a duplex in December of '18 and moved in my first tenant this past February. I've learned a lot throughout the whole process of searching, purchasing, and renting, and plan to continue the growth of knowledge and experience. That said...

My tenant, a single mother of three energetic little ones, is asking to move in her friend, a soon-to-be single mother of two. She claims the stay will be temporary, but I know that "temporary" is relative. The Unit is 1350 sq. ft., has 3 bedrooms and 1 bathroom, and has shared laundry. I'm aware of the local code (Chicago) regarding occupancy limits, and am not concerned about exceeding that limit with seven people living in the Unit. I'm considering accepting the new tenant, but want to make sure all my bases are covered. 

My suggested amendments to the current Lease are as follows:

1.  Increase rent $100 per month for utilities surcharge.

2.  Charge a non-refundable move-in fee for the new tenant if she plans on moving in large furniture.

3.  The current Lease allows for pets under 35 lbs, however, the current tenant does not own a pet. For the amendment, I plan to not allow any pets. I think five little kids will be enough.

4.  Add a provision requiring that should one tenant move out, the other will have to pay the full rental amount.

Of course, I plan on running a full background and credit check on the new tenant, as well as make sure she has enough income to cover the rent in full should my current tenant decide to move out. Is there anything I'm missing? Should I not consider accepting the new tenant?

Thanks for your comments in advance!

[Cassi Justiz]

It's kind of red-flaggy to me that a tenant that's been there for a month is already asking to move other people in with her. It may be a legitimate being nice thing, but it makes me wonder if her friend has some reason she wouldn't have qualified as a co-applicant.

If you want to go for it, and your local laws allow it, then I would try to sign a new lease or lease addendum. I would definitely let current tenant know that her friend will have to apply and qualify like any other tenant. Definitely get them both on the lease as fully responsible for rent amount and damages. I would also try to find a way to do an additional deposit for the "temporary living" situation. 7 people in a 3/1 will cause a lot of wear and tear whether it's intentional or not. 

Also, don't forget to consider the quality of life of the other tenants in your duplex.