Whether you’re temporarily relocating because of a dream job or going on a summer holiday, subletting is a great way to make back some of your rent money. So what is a sublet arrangement, and what exactly does it involve?
Unfortunately, not everyone has the right to sublet their apartment. Before renting the property to another party, make sure you aren’t breaching the terms of your lease. These agreements are legally binding, and breaking a lease can get you evicted or have other serious consequences.
To find out more about the potential pitfalls and what it takes to be a short-term landlord, check out the following guide.
What Is Subletting?
Also known as a sublease, subletting is when a tenant rents out either all or part of the property to a third party before the original lease ends. So what does a sublease mean for cash-strapped renters? In short, it can be a beneficial arrangement for those looking to redeem some of their rent money. Renters can make back up to 80% of the cash they are spending on the lease.
Although there are leases that don’t permit subletting, most simply require you to notify the landlord and get approval for any changes. If the original lease agreement makes no mention of subletting, it’s usually permitted, but it’s always better to get your landlord’s permission in writing.
The best way to shield yourself from any legal entanglements is to ink a sublease agreement with both the subletter and the landlord. This is especially useful if the tenant’s contractual obligations under the original lease agreement include covering the costs of any damage to the property. Additionally, an in-depth background check of potential subletters is a good way to root out those who have a history of not paying their bills or people on sex-crime registries.
How to Sublet an Apartment?
If you decide that subletting your apartment is the way to go, there are a few other things to consider. Subletting can be an excellent solution, as long as you are well-informed about the entire process and don’t rush into things. Here is a complete checklist you need to cover before entrusting your place to someone else.
1. Re-check your lease agreement
The first step is reviewing your existing lease. You need to make sure you are allowed to sublet the property and under which terms. Keep in mind that individual states have their own laws when it comes to subletting.
Any constraints on subletting the apartment should be outlined in your original lease agreement. That’s why it’s absolutely essential that you read it thoroughly before embarking on this journey. And even if your local municipality permits subletting, your landlord may have his own reasons for prohibiting the practice. In such instances, it’s probably best to explore alternative options.
2. Call Your Renter Insurance Company
Before subletting, check whether your renter’s insurance extends to subtenants. Some insurers do cover sublease apartments, in addition to providing standard coverage for your belongings in case of theft. If yours doesn’t, and you can’t sign up with those that do, then it’s probably a good idea to remove your personal belongings from the apartment you’re subletting. Keep in mind that you are the one who paid the security deposit. In other words, the money from your pocket is covering any damage to the property unless you get adequate insurance.
3. Market the Apartment
Next, it’s time to start looking for a subletter. That typically involves posting an ad somewhere. Make sure that your quest to sublet an apartment goes through legal websites. You can also share your ad on social media platforms.
A good approach is to have all the relevant information in your ad, including the rent, list of amenities, and any other relevant details about your apartment. High-quality images of the property can also be very helpful in attracting the right candidates. You should also make sure to avoid any typos, grammar errors, and incorrect information if you want to attract serious subtenants; everything should look professional.
4. Schedule an Open House/Interviews With Prospective Subletters
While trying to figure out how to sublease an apartment, most tenants will immediately start weighing the risks. To avoid any horror stories, get to know the prospective candidates by setting up an open house and following the same procedure you went through when you were looking for a place to call home. When planning an open house, it’s essential to get the timing right and make the interior of your property look pleasant.
Aside from screening potential tenants online, this is a great way to get a sense of whether someone is affable. Remember that these were some of the same hurdles you had to go through when you were renting, and by definition, subletting transforms you from a tenant to a short-term landlord.
That said, landlords are increasingly reliant on social media profiles when determining whether their applicants have suitable lifestyles for the property being rented. With the help of social media, you’ll quickly be able to determine if the subletter owns a pet or likes hosting loud parties. These sorts of details will help you choose one candidate over another.
The last step is to check any references on the applications. While this may seem like a waste of time as it’s unlikely anyone would list previous landlords with whom they had an unsatisfactory experience, you should do it anyway before you sublet an apartment. Ask a few questions and keep your ears open; if there were any disagreements between the two parties, you may be able to pick up on it during the conversation.
5. Sign the Needed Agreements
When you find the right subletter, it’s essential to cover yourself with a written agreement. You can find a sublease template for sublet agreements online, and you can further customize them to fit your own arrangement.
It’s also a good idea to ask your landlord for help on what should be in agreement. They can help you with suggestions on what to add or omit in the contract.
Ultimately, once all parties involved sign the sublet agreement and you’ve received your first payment, you have officially sublet your apartment.
The Pros and Cons of Subletting
The most obvious advantage of subletting is the money. If you’re renting a property that you aren’t living in, you’re pouring cash into an empty apartment. Subletting enables you to fill that financial gap. This is especially helpful if you’re temporarily relocating for work or taking an extended vacation while your lease remains intact. In these situations, sublease, by definition, allows you to retain your original lease.
Of course, a lot hangs on finding the right tenant. While tenant screening services can help, finding a trustworthy and reliable individual can be challenging. If you choose the wrong tenant, bearing the brunt of potential theft and serious property damage.
Subletting comes with a certain level of risk, and therefore, it might not be the best option for everyone. Before going any further, you need to ask yourself one key question: what is a sublet arrangement that you can afford to live with? If you can’t find the right subletter, you should consider alternatives.
First of all, you might be able to negotiate better terms with your landlord and see if there is another solution while you are away on vacation, for example. Your lease might already have the answer to all your problems in the form of an early termination clause. Either way, if you’re uncomfortable with the idea of subletting your space, you should explore the aforementioned options first.