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landlord helpShouldlandlords allow tenants towork out of residential rental property?

Beforeyousay yes to an applicant, consider the pros and cons.

Pros

At least the tenant is working, and that means they can pay the rent.

Cons

Business use of a residential property may violate the zoning regs in your area.

The business activity may irritate other tenants and neighbors, especially if members of the public are invited on to the property or park cars nearby, or the business is conducted early in the morning or late into the evening.

The activity may increase the landlord„¢s liability for events like slip and fall, or compromise other tenants„¢ security.

The tenant„¢s work may cause excessive wear in the unit or increase shared costs.

Best course of action: Landlords should prohibit business use of residential property in the lease agreement.

Compromise: Before agreeing to the business activity, landlords should consider specific zoning restrictions, and talk with an insurance agent about extending coverage appropriate for the circumstances.

Also, a landlord should limit business activity to that initially described and agreed upon so the tenant is not free to change their line of work during the lease.

See our feature,MakeMore Money From Your Rental Property.

American Apartment Owners Association offers discounts on products and services for landlords related to your rental housing investment, includingrental forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.

  • [email protected]

    What the author of this piece fails to recognize is the plethora of businesses that do not require anything in the way of client contact, items transported or other increased traffic flow. Things like genealogy, public records research, web design, medical billing, data processing, typing, book writing, and more are low impact and usually only involve a computer and a cellular modem to accomplish.

    The nature of the business becomes very important.

    Indeed, even a life insurance salesman can schedule to meet most of his clients in their home, over coffee in the public square or elsewhere. A cell phone phone and a briefcase could suffice for his home business needs.

    Turning away a renter for liability sake without knowing more about the business plans is stupid. Ask questions and learn more or risk losing a great potential client.

  • crankylandlord

    I agree with the previous post 100%. I have had tenants do the exact same type of work he is describing with no problem at all. To turn somebody away who works out of the home in a business that does not effect anybody else in this messed up rental market is plain stupid and certainly not the “Best course of action”.

    The only downside is that since they will be home most of the day, the use of the utilities would be a tad higher (of course only if you are unlucky enough to have to pay for them).

  • I had a tenant that was running a business out of one of houses and when I went over to do an inspection I DISCOVERED she was doing hair and had 3 industrial hair dryers in the home . The house didn’t have the proper wiring to handle the amount of electricity that the dryers was putting out and it was destroying the wiring in the house as well as over loading the circuit the electrician said it was an accident waiting to happen. so I GUESS IT WOULD DEPEND ON THE TYPE OF BUSINESS AND THE AMOUNT OF PEOPLE THAT WILL BE IN AND OUT OF THE PROPERTY WILL BE WHAT YOU USE TO DETERMINE WHETHER IT’S OK OR NOT.

  • Anne M.

    I had a tenant who did all her work online. She was a software programmer who tested her code on a number of different platforms. She needed 13 computers, so she paid to have the property’s electrical panel upgraded and purchased sufficient insurance to cover my property for the additional risk she was adding. She was my most responsible, reliable tenant, and I was sorry her family outgrew my property and she had to move shortly after the new baby came. She saved a lot on child care costs because she could have the baby work right with her in the home office. I’m glad I took the time to get to know the nature of her business.

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