If you’re a property owner, you may be familiar with the term “subleasing.” It’s when your lease-signing tenant leases out their spot in your unit to another “subtenant” for a period of the lease’s term. This happens most often on college campuses as students begin internships, move home for the summer, or study abroad, but it can be done to any lease. Subleasing is more common than you might think, so it’s a good idea to establish your own rules and regulations on subleasing before letting a tenant sign a lease.
What’s the Difference Between Subleasing and Subletting?
But what is subleasing in comparison to subletting? The two are similar but have some key differences. Subleasing, as mentioned, is when your tenant leases their spot to a “subtenant,” effectively turning themselves into the “landlord” for this person but still holding responsibility for the lease they have with you. Subletting, on the other hand, is when a tenant finds a replacement tenant to take over their spot on their lease, relieving themselves of the obligations of the original agreement (with your permission, of course).
In this article, we focus on the subleasing meaning for your unit — when an original tenant holds the obligation of and acts as an intermediary on the lease.
The Benefits of Subleasing
Though at first look it might not seem to have many worthwhile advantages, subleasing can be vastly beneficial to you and your property. For one, it keeps your units filled all year long. Tenants must essentially find a replacement to take over the lease for an agreed-upon period. If your lease has a subleasing agreement, it may be more marketable for tenants because they’ll feel comfortable traveling and pursuing experiences away from home.
While doing this, tenants can also bring in some extra money, though it’s a good idea to write shared profits into the subleasing agreement if a tenant is considering charging a higher rate for a new renter so things don’t get out of hand. A tenant can ask for a higher rate from a subtenant to bring in more cash, but if they end up charging a lower rate than your rent, the original tenant is ultimately responsible for paying the amount every month.
Further, subleasing ensures that your unit won’t be targeted for crime if your original tenant is planning on traveling for an extended period. If left empty for long periods of time, your property is more vulnerable to robberies or other crimes, but if someone is coming and going regularly, criminals are more likely to stay away.
Understanding the Disadvantages
When a tenant subleases your unit, they become a landlord for their subtenant and an intermediary between them and you. This could cause some inconvenience when it comes to communication, however. If the unit has an issue or needs maintenance, the subtenant must inform your tenant, who then must reach out to you. This added step can be both annoying and slow and should be kept in mind when considering subleasing for your property.
Additionally, writing a vague sublease can leave too much power over the rental process in the tenant’s hands, and if legal issues arise with the subtenant, proving legal fault is much more difficult than it would be with the lease-signing tenant alone. Weighing every possibility when writing sublease information into your rental agreement is essential and can save you quite the hassle in the long run.
Subleasing Meaning for Your Lease
Speaking of writing subleases, here are the three things you should include in your leasing agreement if you do decide to allow it on your property: Establish clear expectations about how rent will be collected, decide who will be responsible if the property is damaged during the subleasing period, and define your involvement in approving or screening a subtenant.
One of the easiest ways to relieve the stresses of subleasing processes is to use property management software. Many property management platforms include features like online leases and payments, simplifying rental tasks for everyone involved. Depending on the software, you can also input subtenant information to keep everyone in the loop and ensure both tenants are responsible.
Conclusion
Subleasing can add value in several ways, but there are risks involved that shouldn’t be overlooked. It’s important to have a strong understanding of the ins and outs of subletting vs subleasing, research how subleasing can work for you, and implement rules and responsibilities in your units when it does occur.