01 Sep Tenants with Home Businesses | Owner Update
The Nature of the Problem
The most recent fifteen years, from the mid-nineteen eighties to the present, have presented the average American worker with unprecedented economic growth coupled with previously unheard-of job insecurity. Even as United States manufacturing firms increased profit, productivity, and shareholder value, they continued to whittle away previously secure job positions. In short, fewer workers are producing more goods for less money.
However, during this era of downsizing, the average worker has come away protected in many ways. In order to avoid costly lawsuits, many companies provide severance pay packages that cushion lost job income for several months. Further, workers today is better educated and skilled to find other occupations at the time of separation. The result has been an explosion in business opportunities (franchises) and home businesses.
The Opportunity
Many tenants today work from their homes. The best situation for a property owner is to have a tenant that uses their home as a “base” from which to consult with clients at their place of business. The next best option is to have a tenant that uses the rental as an office for administrative paperwork. While the carpet wear and tear in the room used for an office will be excessive, it can be a small price to pay for a good long-term tenant.
The worst case is the tenant that uses the rental for aggressive and messy repair work. Using an apartment or garage for auto repair or other non-residential use is typically a violation of both the City Code and the rental agreement. The difficulty of enforcement comes first in detection and later in enforcement. The City is called in for truly flagrant violations to issue a notice of Code violation. In the more subtle cases, CRESTWAVE Property Management will call the tenant to advise of allowed property uses and request cessation of any unauthorized uses. Failure to comply will result in a notice to vacate and eviction if the tenants remain. With proper rental application paperwork at the start, including job information and references it is usually reasonable to recover damages.
Action Plan
Crestwave examines every new applicant carefully for potential home business tenants. Several key indicators include a work number located in a distant area code. When calling toll-free employment numbers, the question of location is asked. Field sales jobs often require a home office and are carefully screened. Any rentals with a separate locked garage are also carefully screened for garage use.
Are you looking for property management services in Long Beach or Huntington Beach? Crestwave is here to help. Give us a call at 562-590-6464 or contact us to get started!