Allowing Sublets: Should You or Shouldn’t You?

If you own rental properties long enough, you’ll eventually face this question — Should I allow a tenant to sublet an apartment? This question emerges because of a variety of situations:

• Your tenant gets a new job in a new location and needs to move immediately.
• Your tenant is getting married and needs to find someone else to finish out their lease.
• Your tenant loses a job and can’t afford to pay rent anymore.
• Your tenant simply wants to live somewhere else.

As with almost any management situation, there are pros and cons of subletting an apartment. Is allowing subletting a good idea for you? It depends on your situation, the tenant you’re dealing with and myriad other factors. To help you make the best decision about a subletting lease rental agreement at your property, here’s a rundown of the key considerations to ponder before you make a final choice.

Pros of Allowing Sublets on Your Property

Let’s start with the good stuff. Allowing subleasing can be a marketing tool. Sometimes it comes up as you’re showing a property to a prospective resident. They want to know if you allow subleasing. You answer “yes,” and they’re sometimes more likely to rent. You answer “no,” and they could be more likely to pass. Of course, when it’s a renter’s market rather than an owner’s market, you’ll be more likely to make concessions out of financial necessity.

Subleasing is also often a more desirable situation than forcing a tenant to pay for an empty apartment. For example, if you have a tenant who is traveling abroad or going home from school for the summer, it’s better for security, maintenance and the overall function of the unit for it to be occupied. The subleasing tenant will use the plumbing, gas and electricity, and they can let you know if anything goes wrong — rather than you finding out only after the primary tenant returns. Ultimately, you’ll have a happier tenant – which is always the best situation to be in.

If you do choose to allow subletting lease rental agreements, here’s one key.

You must have a relationship with the subleasing tenant. If you let the primary tenant play middle man without getting to know the person living in your property, all sorts of challenges and inconveniences turn up.

It’s OK to allow subleasing in some situations, but you must always invest in the subleasing tenant and get to know them. Make sure you have their contact information, and create a relationship with them. It makes for a better situation for all involved.

Cons of Allowing Sublets on Your Property

The No. 1 potential drawback to allowing subleasing is that you can lose control over choosing who lives in your property. When you first filled your unit, you likely went through a lengthy and thorough screening and vetting process. After all, you want the best possible tenants for your properties. But since that primary tenant is still contractually obligated to pay you, you may not be able to vet the subleasing tenant fully.

These issues, however, can be mitigated by requiring the sublessee to go through the same screening process as your initial tenant. You may also want to consider charging them a security deposit.

Finally, one of the greatest inconveniences is if or when you must evict a subleasing tenant. This is especially painful if they’ve been keeping up with their end of the bargain while the primary resident hasn’t lived up to their contract with you. In essence, you’ll need to evict two tenants for the price of one. Evictions are a big enough pain on their own without layering in the challenges of evicting a sublet tenant.

What Should You Do About Allowing Tenants to Sublet?

Again, this is your decision. Subleasing is perfectly acceptable under the right conditions — especially when it’s a tough rental market and you need to keep units filled. But if you don’t have trouble filling your units and you’d prefer to avoid the headaches that often accompany subleasing, take a pass. There are no subleasing laws that require you to allow it, so make the best decision for you.

And one final thing: You may find tenants who sublease without your permission. This should be a total non-starter. You must know who is living on your property for a number of reasons, and you do have illegal subletting landlord rights that should be standard as part of your lease agreements. Whether or not you choose to sublet, you should always maintain as much control as possible over your properties and tenants who are calling them home.