What is Subletting? Guide to Sublet Apartments
Subletting. You’ve probably heard the term a few times before, but it’s one of those words that doesn't offer a clear definition. If you, like many others, aren’t sure what subletting is, no worries. We’ve got you covered with everything that you need to know about subletting and whether it’s the right move for you.
What is Subletting?
A sublet, sometimes called a sublease, is a contract under which a tenant rents out their apartment to another individual while their name is still on the lease. The original tenant is referred to as the sublessor, and the new tenant is referred to as a sublessee.
This differs from simply renting out a room to a roommate. When subleasing, only the original tenant's name is on the lease. In a roommate situation, all tenants are named on the lease.
There are many reasons why someone might choose to sublet their apartment. Sometimes a person must move out of their apartment before their lease ends. Or perhaps a renter must move out of town for an extended period of time. Subletting an apartment allows tenants to avoid breaking their lease and save money if they intend to return after a period of time.
How to Sublet an Apartment
Subletting an apartment can be an easy, pain-free experience if you know what you’re doing and take the time to do it right. Unfortunately, this can be hard if you’re in a rush to get out of town. Here’s everything that you need to know about how to sublet an apartment.
1. Make Sure You Are Allowed to Sublet
One of the most confusing things about subletting an apartment is determining whether or not you’re actually allowed to do so. There are varying laws regarding subletting on both a state and municipal level. Not to mention, your landlord may have a clause discussing subletting written into your lease agreement.
That’s why it’s imperative to ensure that you’re legally allowed to sublet. Go over your lease and rental agreement thoroughly and look for anything mentioning subtenants and subleasing. Sometimes landlords don’t want anyone other than their own vetted tenant, you, living in their property. If you don’t see a clause in the lease, be sure to ask your landlord.
They may refuse to allow you to sublet, even if state and municipal laws say that you can. If they “unreasonably” refuse to allow you to sublet, you may take them to court. However, if their rejection is reasonable, you are legally not allowed to sublet. If you find that you are allowed to sublet and have your landlord's permission, be sure to get it in writing.
2. Check-In With Your Renter’s Insurance Company
Renter’s insurance typically covers your belongings in the event of a theft and limits your liability if someone is injured in your home. It may also extend the coverage of your living expenses if, for some reason, you are unable to occupy the home you currently reside in.
Before subletting, check-in with your renter’s insurance provider to determine whether your coverage extends to subtenants. If it doesn’t and the provider doesn’t have any packages that do, you may have to remove your personal belongings from the home. This will prevent you from having to cover any damage to your property out-of-pocket that comes from a subtenant. Remember, you paid the security deposit when you moved in. Therefore, damages caused by the new tenant is money out of your wallet.
3. Sign a Sublet Agreement
After finding the perfect subtenant, you can then have them sign a sublet agreement. There are many sublet agreement templates online that you can customize to suit your needs.
However, it may be a good idea to ask your landlord for some help. They can make suggestions for any clauses to add or omit. Once you’ve both signed the sublease agreement and you’ve received payment — congrats! You’ve officially sublet your apartment.
Should You Sublet?
Subletting your apartment lets you see the other side of renting, the landlord’s side. It can be stressful and, frankly, difficult to pull off subletting your apartment. From finding the right tenant to collecting rent payments from wherever you might be, subletting isn’t for the faint of heart.
However, before you make a decision, it’s a good idea to understand the pros and cons of subletting.
The Pros of Subletting
- Avoid Breaking Lease Early - Whether you’re moving away or going on an extended vacation, subletting can help you avoid breaking your lease which can damage your renter’s history and result in a fine.
- Avoid Losing Money - Paying rent on an apartment that you aren’t living in, isn’t only a waste of time… it’s a waste of money.
- Freedom to Travel - Subletting your apartment allows you to avoid that tied down feeling we get when we call one place home for too long. Let your wanderlust thrive by subletting.
The Cons of Subletting
- Difficult to Find the Right Tenant - The perfect tenant is one in a million, meaning that along the way you’ll likely encounter a number of subtenants with poor renter’s history.
- Potential for a Subtenant to Break Agreement - There’s no guarantee that a subtenant won’t experience the same life changes that caused you to have to leave your apartment. If this happens, you’ll be stuck paying rent for an apartment that you’re not living in or risk breaking the lease.
- You Put Your Reputation on the Line - If your subtenant turns out to be a disaster, your landlord may evict you. This could cause tons of future issues when you look for your next apartment.
4. Post Your Sublet and Market It
Put on your thinking cap and come up with an eye-catching sublet advertisement. Be sure to include quality photos of the apartment, a list of amenities, and the rent cost. If you have any roommates, be sure to include that here as well. Highlighting the neighborhood and any nearby attractions is also a great way to sell your home. Giving as many details as possible of your apartment is important. This helps you attract more potential subtenants than you would with a vague description and no pictures.
You can ask your landlord for help with this or ask them to send you a copy of the ad they used when you moved in. Take that advertisement and tweak it to suit your needs. You can post your ad on social media and sites like Nextdoor or Craigslist.
Be wary of the sites that you post on. To limit the scam emails that you may receive, create a separate email address and don’t put your number online.
5. Screen Potential Subtenants
Once you have gotten a few offers on your apartment, schedule a sort of “open house.” You’ll be responsible for showing the apartment to potential subtenants. Once you have shown the house, tell subtenants to submit an application that you have created.
Although this is typically the landlord's role, you'll essentially be acting in their stead to screen potential subtenants.
You'll need to verify their identity, follow up on their references, and review their social media presence.
Here's a breakdown of how to screen a potential subtenant.
Verifying a prospect's identity can help protect you from falling victim to fraud. If a prospect's identity information is invalid, you can safely move on to the next candidate.
Most landlords perform tenant screening using third-party services. However, you may not have access to the same tools.
You can ask a prospect to provide at least one of the most common ID documents, including a driver’s license, state ID, or passport, to verify identity.
Regardless of the documents you choose, verifying a prospective subtenant's identity is crucial.
Reference Social Media
Referencing a prospect's social media profiles can provide you with a bird’s eye view of their lifestyle and habits, which is helpful when deciding whether they will be a good match for the apartment.
For example, if an individual has recently posted photos of their new puppy and your apartment is not pet-friendly — they would not be a good fit.
If applicable, you can also determine whether a prospective subtenant's lifestyle will mesh with your current roommates. For example, if a prospect has multiple recent posts of them smoking, it may create a bad environment for a roommate with asthma.
Ask for References
Rental references are a standard part of the rental process, regardless of whether you are subleasing or not. That said, you should ask any prospective subtenant to include at least two references.
References are typically professors, previous landlords, supervisors, or any other individuals who can provide a valid assessment of a subtenant's personality, trustworthiness, and dependability.
Just be sure to actually check these references. Even if a prospect looks good on paper, you never know what their previous landlord or supervisor might say. In short, the effort is worth the peace of mind.
6. Interview Potential Subtenants
Speaking to potential tenants gives you a chance to learn more about them and get a feel for their personality in person. Interviewing is an essential part of the subleasing process. It’s also a chance for potential subtenants to ask questions and voice concerns.
You may conduct the interview anywhere, though it may be best to interview in a public place, such as a coffee shop.
Questions to Ask Subleasers
You must do your due diligence when searching for prospective subtenants, which is why it's crucial to ask the right questions.
Here are some of the most important questions to ask subleasers.
Why are you interested in this short-term lease?
Generally, prospects who seek out short-term lease agreements are in transitional periods in their lives.
Whether they are looking for a place to stay over the summer months or preparing for a move across the country, the freedom of a short-term lease agreement means that they can walk away at the end of 30-days.
Of course, this can be an issue for subletters who are looking for an individual to stay for the duration of their lease term. If their subtenant doesn't renew their lease each month, it can put the rent cash flow in jeopardy.
It’s crucial to understand a prospect's motivations for choosing a short-term lease. Knowing whether they are looking to stay for one month or four months can make a big difference.
What is your monthly income?
A subtenant's monthly income requirements should be the same as yours were when you applied for the apartment.
Generally, landlords require tenants to earn a pretax income of at least three times the monthly rent. If a tenant's monthly income does not meet that limit, they may be rent-burdened and unable to consistently cover the rent.
You may ask for pay stubs or alternative documents to verify a potential subtenant's income.
Do you have funds available for a security deposit and the first month’s rent?
Subtenants will have to cover the cost of a security deposit and the first month's rent upfront.
As a security deposit is usually equal to one month's rent, they will essentially need to have two times the price of rent available in liquid cash.
Asking prospects whether they have funds available to cover the costs can help you weed out prospects that can’t afford the expense.
Have you ever been evicted?
If a prospect has been evicted previously, it indicates they have made an egregious breach of their lease agreement.
Because this breach can range from missed rent payments to significant damage, it's important to know whether a tenant has previously been evicted and why.
It is legal to refuse to sublease to an individual who has been previously evicted, as this is not a protected status.
Have you ever broken a lease?
If a tenant has broken a lease agreement, they may do so again.
Unfortunately, a subtenant's broken sublease can mean that you're on the hook for covering rent payments in their absence.
However, life happens. If a tenant has broken a lease agreement previously, ask about the event. The tenant may have had legitimate reasons for breaking the lease and may have done so only out of necessity.
Do you consent to a credit and background check?
When running a credit and background check on a potential subtenant, you'll need their written consent to access the information.
Moreover, the prospect will likely have to provide their social security number and other relevant details upfront.
Without this consent, you cannot move forward with a full tenant screening process, which may disqualify them from candidacy.
Alternatives to Subletting
Subletting is a great option for those who don't want to break their lease and lose out on money. However, it's not the only option for renters who find themselves needing to change their living situation.
If you are nearing the end of your lease agreement and want to renew, you can attempt to renegotiate your lease terms.
You may be able to acquire a short-term lease agreement that provides you with the freedom and flexibility you need. You may even be able to negotiate at a lower rate to offset the cost of paying rent if you are going to be away for long periods.
If necessary, you may be able to break your lease without a penalty. Because there are serious consequences to breaking your lease agreement, including a reduction in your credit score and added difficulty in future renting, many renters avoid this route.
However, if your lease agreement has a favorable early termination clause, you may be able to vacate if you buy out your lease or pay a penalty fee. If you want to break your lease, start by reviewing it to determine your options.
The Bottom Line
Don’t let subletting get you down. If you are in a bind and need to sublet your apartment, take steps to ensure that you are doing it the right way to get the most out of your subletting experience and avoid headaches.