Real Estate Agent vs. Broker - What’s the Difference?

If you have a detailed and signed lease with tenants who follow it to the t, you’ve hit the landlord jackpot. It’s not always that easy, however - many landlords have shaky relationships with their tenants and will often find themselves in situations where an unpleasant confrontation is unavoidable. A tenant’s lease ending can be very frustrating for a landowner. There will be those unicorn tenants whose lease landlords will be happy to renew. More often, however, “How long can a tenant stay after the lease expires?” is just one of those questions a landlord might ask themselves with a tenant lease near expiring. The best route is to contact your tenants even before the lease expires and discuss with them whether you would like to have them stay or figure out whether they’re planning on leaving. Starting the process early will give you the time to attract new tenants if your property becomes vacated. But if it’s already too late for that, here are the answers to some common questions that might be keeping you and other landlords up at night. What Happens When a Rental Lease Expires? As mentioned before, this typically depends on your relationship with the tenant. If they were a good renter, you might consider renewing their lease. Otherwise, you could continue to accept rent from them without a lease agreement, which would be viewed as a tenancy at will - something we will discuss further below. Finally, you can start the eviction process, but that can be troublesome and time-consuming, so avoid it whenever possible. Smart landlords typically set up a clause in the lease on what happens after it expires. It can stipulate that the lease is automatically renewed or switch the tenant to a month-to-month agreement. If no such agreement is established, tenants turn into “holdover tenants.” What Is a Holdover Tenant? By default, as soon as their lease expires, a tenant becomes a holdover tenant. However, this is far from optimal for landlords - you’ll want to avoid having holdover tenants and redefine their tenancy within some kind of agreement. Without a lease in place, there’s not much to protect either party if anything goes south. Ambiguous leases are also very unhelpful. Some tenants will try to pay rent even after the lease expires, and you should avoid accepting that before putting the terms in writing. If you do take the rent, you expose yourself to several risks down the road. People whose lease expired and are still paying rent fall into two categories: Tenancy at sufferance and tenancy at will. Tenancy at Will This category entails paying rent and living on a property without a lease but with the landlord’s approval. It is a tricky position to be in for both landlord and tenant, as, just like the name suggests, either party can change their mind at any time. Tenants can stop paying rent and vacate the premises, and the landlord can tell them to leave by serving them an eviction notice with no warning. This term is sometimes used interchangeably with a month-to-month lease, but renting month-to-month after the lease expires is still commonly regulated by some type of written agreement that states how long the state can last or the conditions under which the lease ends. Tenancy at Sufferance Tenancy at sufferance is a situation that often ends badly, as it means that the tenant pays rent and occupies the property against the landlord’s wishes. If you, as a landlord, don’t want the tenants to stay, but they are staying anyway, you shouldn’t accept rent, as it can complicate the situation if you are forced to start an eviction process. After all, you shouldn’t have to accept “forever” as the answer to the “How long can a tenant stay after the lease expires?” If your tenants remain on your property against your wishes, you should refuse to accept money or extend the lease, thus making the tenant a trespasser on your property. This will help you prove that you don’t want them there if the situation escalates. How can the situation escalate, you might wonder? The tenant might up and leave, leaving you with unpaid rent. While you can overcome this situation relatively easily by going to a small claims court or hiring a collection agency, there is a worse situation to be in - the one where the tenant refuses to leave after the lease expires. How to Get Tenants to Vacate the Property If a landlord doesn’t want the tenant to stay on the property any longer, there are two approaches to solving this issue.  Offer Them Cash for Keys Before starting an eviction, which on average costs $3,500, to get your property accessible for rent again, you might want to try the good old cash-for-keys solution. It may not be legal in your state, and it requires some negotiating, but it is undoubtedly the cheapest option in terms of both time and money. You would be offering your tenants cash to move out, and if they accept, you will be able to rent out your property to someone else sooner than you would with another solution. If you are comfortable paying the tenant who stays after the lease expires to vacate the property, make sure to put the terms in writing and not pay up before your former tenants move all of their belongings. There have been many instances when personal belongings created problems for both tenants and landlords. Starting the Eviction Process While, as a landlord, you might be considering eviction first, we’re leaving it as a last resort. Each state has its laws on eviction, so it can be challenging to estimate whether eviction is the right step to take. Some state laws favor tenants, other landlords. It would be advisable to hire a lawyer, or at least inform yourself of the applicable eviction laws in your state. If your question is: “How long does it take to evict a holdover tenant?” the answer can range anywhere from a few weeks to a few months, and it depends on the tenants’ rights. The first step is typically serving the tenants with an eviction notice, which they will hopefully abide by, and leave your property. If not, the landlord needs to promptly file an official complaint with their local rent court after the notice expires. After this, the eviction court hearing date will be set, and it would be best to have a lawyer accompany you there. Eviction after a lease expires can be very unpleasant, which is why the better-safe-than-sorry approach is crucial when choosing tenants. It is always recommended that landlords perform a detailed background check on their prospective renters beforehand. Writing a clear lease that leaves nothing to chance and ensuring that your tenants are familiar with the terms before they move in are keys to a happy landlord-tenant relationship. Summary To sum things up, as a landlord whose lease with the tenant is soon to expire, you certainly have many options. You can try renewing their lease in one form or another, offering cash for keys so that they will move out faster, or try to evict the lease-expired tenant who won't leave. The best way to handle any stressful situation with your tenants is to be proactive about things and prevent any unpleasantness. Screen your tenants, create a thorough lease that works for both parties, and approach any case involving your tenant with an open mind: Having an honest conversation with your tenant and finding a win-win solution together trumps any other option on this list.

Renting out property can be a great source of income, but it isn’t always smooth sailing for the landlord. Aside from rent collection and potential disputes over maintenance costs, there are a few other scenarios that can complicate the landlord-tenant relationship. One of these is guests overstaying their welcome.     These are individuals who stay at a property for an extended period of time without the landlord’s explicit permission. That’s why it’s important to answer the fundamental question: when does a guest become a tenant?   Everyone has friends that need a place to stay while they’re between jobs or family members that fall on hard times. But the lease should always reflect the presence of individuals who are living at your property for several months. After all, these long-term guests are a liability for both the tenant and the landlord. Keep reading to learn how to identify and deal with these situations.  Guest vs. Tenant - Is There a Difference? Tenants typically have a lease or at least a verbal agreement with the landlord, which obliges them to pay rent and permits them to make maintenance requests. Guests don’t. A guest visits occasionally and doesn't have any financial or legal obligations. Depending on their agreement, tenants can welcome guests and allow them to stay over for a certain period of time without the landlord’s approval.  The lines get blurry when the term “occupant” comes into play. While some see occupants as anyone staying the night, the main difference between a tenant and an occupant is that the latter might reside at a property, but the obligations of the lease still fall exclusively on the tenant.  Occupants are most commonly children. You aren’t under any legal obligation to add them to the lease, and they cannot be treated as tenants. Whatsmore, everyone is clear about the fact that they are covered by the tenant’s rent.      Guests, on the other hand, can overstay their welcome, especially if the costs of them living on the property start piling up. So whether you want your partner or an old college buddy to stay at your place for a while, it’s important to ask: how long can a tenant have a guest?.  Here, it’s important to make a distinction between a few scenarios that may cause confusion. For instance, if a college student comes back home every winter/summer break but always returns to school when the vacation is over, he is just a guest. However, if someone moves in because they’re no longer in school, that person becomes a tenant. Also, anybody visiting their children or helping out with a newborn is a guest. That’s not the same thing as an elderly person moving in with relatives because they’re incapable of living on their own.  How Many Days Can a Tenant Have a Guest Visiting in the Home? The answer to this question usually depends on the agreement between the landlord and the tenant. The rules should be outlined in the guest policy section of the lease. Most landlords don’t allow guests for more than 14 days during a six-month period. However, landlords can have stricter rules, and it’s within their right to put them in writing. And while most property owners will request permission to conduct a thorough screening of their tenants, this isn’t an option with guests due to existing legal constraints. That’s another reason why communication with the landlord is essential. Tenants who plan to host someone for a longer period of time should get prior approval from the landlord. How and When Does a Guest Become a Tenant?   The most common way for a guest to become a tenant is by adding their name to the lease. However, in practice, the courts can recognize many different circumstances as proof that a guest is actually a tenant. For example,  if a landlord accepts money or another kind of compensation from a guest for their stay, the guest automatically earns the rights of a tenant. Additionally, if someone enters into a verbal agreement with the tenant and is covering part of the rent, they can be considered tenants. In some states, any guest who stays for longer than two weeks is considered a tenant by default.  Can a Landlord Prohibit Guests? Technically, landlords can’t prohibit their tenants from having guests over. However, they can add sections to the lease that cover the tenant’s rights concerning visitors. But there are a few other factors to consider. For example, federal occupancy laws tell the landlord how many people are allowed to stay in each bedroom, while zoning laws can even limit the type of relationships that those renting in certain areas can have.  That said, most landlords don’t really care how many guests the tenant has as long as they don’t receive noise complaints from neighbors and there isn’t any illegal activity going on like drug use. If any of these guests are thinking about establishing residency in a home, the landlord needs to be notified, and the lease agreement needs to be updated.    Talk to the Tenant  Every situation is different, and the landlord needs to be open to the tenant’s side of the story. The guest can be a family member or a friend who needs a place to stay until they get back on their feet. It could be someone trying to escape an abusive relationship or a special somebody who wants to move things to the next level, but the tenant isn’t sure about adding such an occupant to a lease yet. After talking to the tenant, the landlord can do a number of things depending on the situation: Add the Guest to the Lease If the tenant is willing to allow the guest to stay on the property, then the best course of action would be to add the guest to the lease. It’s vital to integrate long-term guests into the agreement so that all those living in the property are liable for what happens there. The lease agreement protects all the parties. If the guest is having mail delivered to the tenant’s address, bringing in their furniture, or parking the car in the unit’s parking spot, it’s time to add them to the lease and increase the rent to cover an additional person living on the premises.  This isn’t a violation of the tenants’ rights to have guests. It’s just a way of binding people living on the property to the terms of the lease. If the tenant shares the landlord’s concerns about their guest’s long-term stay, they may decide to take on the role of the landlord and evict the guest themselves. Of course, if the tenant doesn’t want to agree to any of the aforementioned options, he is effectively breaching the terms of his lease, which is grounds for eviction. Evicting the Tenant If tenants continually host occupants who are not on the lease and who aren’t covered under the terms of the original agreement, landlords have little option but to evict them.  Landlords can serve their tenants with an eviction notice for breach of lease because of unauthorized guests, though this can be hard to prove in court. The best course of action is to serve the tenant with a notice of non-renewal, which tells them that you won’t be renewing the lease. If the tenant is paying rent on a monthly basis, you could have them out before the start of the new month. All in All Communication is usually the key. However, if the landlord and tenant can’t come to an agreement, the landlord should consult with a lawyer. Considering the fact that each state has its own laws on tenancy, legal advice may be necessary in order for the landlord to resolve the situation. In some cases, the best solution may be to come to a temporary house guest agreement that benefits all parties.

If you are renting out residential property such as a house, apartment, or vacation cottage for the first time, you may expect that your homeowners’ insurance will cover all the costs in case of a natural disaster, accident, or any other damaging event. Such an assumption is a recipe for disaster. Luckily, there is a type of coverage for landlords that can protect you from all threats related to renting out a property. But what is landlord insurance, how does it work, and do you actually need it? Keep reading to find out. Why Do You Need Landlord Insurance? Landlord policies offer protection similar to homeowners’ coverage, such as dwelling insurance in the event of a fire or burglary. The main difference between the two types of insurance is that most homeowner policies only apply to owner-occupied properties. Should you start renting out your real estate to someone else, the coverage will no longer apply. Landlord policies are uniquely written to protect you against risks you may face as a rental property owner, such as injury liability or loss of income. Considering that tenants are rarely held liable for significant appliance malfunctions, burglaries, or forest fire damages, you could be left with serious consequences caused by such misfortunes. Therefore, getting landlord insurance makes a lot of sense. Still, given that these policies come in many different shapes, we advise that you take your time to figure out what you need to ensure that you get the right landlord insurance policy. Types of Coverage for Landlords Based on the length and frequency with which you rent out your property, there are three main types of insurance policies for landlords: Policies for long-term renters: Also called a rental dwelling policy, a long-term renter’s policy is designed for homeowners who rent out their house or apartment for a minimum of six months on end. Although similar to homeowners insurance, this type of insurance is designed to protect you against losses you may face as a result of hosting a tenant for an extended period. Policies for occasional short-term renters: Property owners who rent out their primary residence for short periods and only occasionally may not need to buy additional landlord home insurance, provided that they have an existing homeowners policy. They need to confirm that coverage with their insurance company, though, as some insurers require an additional rider when the home is rented out, even though the coverage type still falls under the homeowners’ insurance category. Coverage for frequent short-term renters: Homeowners who rent out their primary residence regularly for short-term periods (e.g., Airbnb hosts) are typically labeled as business owners by their insurance company. In these situations, property owners cannot count on traditional homeowners insurance policies. Instead, they need to find a good commercial policy for their rental property insurance needs. What Does Landlord Insurance Cover? Most landlord policies come with three core protections: Property damage: Much like dwelling coverage offered by home insurers, landlord insurance protects you in the event of damage to the structure or furnishings of your home due to perils such as a natural disaster (fire, wind, hail, snow, or earthquake), electric/gas malfunctions, vandalism, or irresponsible tenants. Here’s a piece of advice - try and get a policy that covers replacement costs instead of providing a predetermined lump sum of cash or the actual cash value (especially if your furnishings and appliances are old). Note that landlord insurance for a rental property typically doesn’t cover your tenants’ belongings. Liability protection: Your landlord policy's medical coverage or liability clause covers medical or legal costs associated with injury claims made on your property due to a property maintenance issue (such as an insect hive or an architectural collapse). Furthermore, this type of insurance can also come in handy if a landlord is found responsible for damage to the tenant's property. Loss of rental income: Also referred to as rental default insurance or rental reimbursement, this clause in your landlord policy protects you from losing income if your property is damaged and uninhabitable due to a fire, severe storm, rat infestation, or severe case of mold. While most policies for landlords offer this type of coverage, it’s better to be safe than sorry and ask your insurance agent if rent-loss insurance is included in your policy. If not, make sure to add it as an optional rider. Additional Coverage There are a few more common riders that help form comprehensive landlord insurance policies. Although not as important as the aforementioned provisions, these optional endorsements could come in handy and potentially save you a lot of money in the long run. Here’s a list of the most popular optional riders offered by most insurance companies: Guaranteed income insurance: Unlike rent-loss insurance, this type of endorsement covers the landlord if a tenant doesn't pay the rent for one month or comes up short on the payment. Even if you take the time to perform a credit check and background screening for your tenants, you can never be completely sure that they’ll always make rent on time. Flood insurance: Keep in mind that some landlord rental insurance policies don’t include flood damage related to municipal plumbing or natural disasters, so opting for this rider can prove invaluable for properties in a flood-prone zone. Additional construction expenses: Also referred to as building code coverage, this type of protection will cover the expenses of bringing your building up to current codes after it has been damaged. Emergency coverage: This protection type comes in handy if a tenant asks you to do minor repairs or gets accidentally locked out of the property. You can use the emergency protection rider on your rental home insurance to cover some or all of the costs of getting to the property and resolving the issue. Non-occupied dwelling endorsement: If your property is uninhabited for more than a month, note that your insurer may deny you coverage for any claims that arise while the home is empty. Adding the non-occupied dwelling rider will extend your coverage to cover periods of vacancy. Creating a Real Estate LLC A real estate LLC deals with buying, selling, or renting residential and commercial properties. Creating an LLC for a rental dwelling is a smart choice for any property owner, as it can also work as a type of landlord’s insurance for the rental property. Not only does a limited liability company structure separate your business and personal assets, it reduces the owner’s liability and comes with the benefit of pass-through taxation. Another great thing about turning your rental into an LLC is that it’ll give you more credibility when approaching new partners or clients - no matter if you work as a real estate professional or just have a single property you want to rent out. How Much Does Landlord Insurance Cost? Now that we’ve answered the question “what is landlord insurance,” it’s time to talk about the cost of this coverage type.  According to a report by the National Association of Insurance Commissioners (NAIC), the average cost of homeowners insurance was $1,211/year in 2019, although the prices varied widely from state to state. However, given that rental properties are more prone to accidents and damage, you shouldn't be surprised if insurers ask 15% to 25% more for landlord coverage than they would for homeowners insurance of the same property. Here’s a tip for shopping around for landlord coverage: Remember to ask your home insurance provider for bundle options. If you sign up for homeowners’ and landlords’ insurance through the same company, you may be eligible for a discount.