Renting a Home: From the Owner’s Perspective

WHETHER you’re renting out your family home orapartments you’ve built as an investment, renting propertiescan be a daunting task.Finding the right tenant – one who will take care ofyour property, get along with the neighbors and, moreimportantly, not leave after only a month – is not easy.Fortunately, there are people who have gone through theordeal of finding a tenant before and have valuable experiencesto share on how to and how NOT to rent a property.IN 1988, when Iris Herrero built her dream home inEscazú, a suburb west of San José, shewas convinced she would grow old andretire there. Herrero worked closely withthe architect to make sure the houseturned out just as she had envisioned it.She visited the construction site nearlyevery day for nine months, until thehouse was finished. The final productwas everything she ever wanted.In 1992, she received an opportunityto study in the United States. Presentedwith a once-in-a-lifetime opportunity shecould not pass up, Herrero left her dreamhome. To cover her living expenses in theUnited States, she would have to rent outher home.She returned to Costa Rica in 1994 – and found herdream home in shambles. The tenant’s children had paintedon the walls, the kitchen counters were chipped andnasty mildew had invaded the bathroom tiles. She repairedthe house and lived there for another four years.IN 1998, Herrero decided to move to the United Statespermanently. Again she faced the ordeal of finding a tenant.However, she had learned from her previous experience.She was better able to judge potential tenants and filterout those she feared would not properly take care of herhome.The second time around, she took longer to find a tenant– in part because of the saturation of Escazú’s realestate market and also because she had become pickierabout whom she would rent the home to.“Basically, the most important thing is hiring a good realestate agent – one you trust and knows exactly what kind oftenant you’re looking for,” Herrero said. “A good tenantmakes all the difference. Having a good tenant who caresabout the house and that I trust really puts me at ease.”The agent is in charge of screening potential rentersand filtering out the ones that aren’t a good match for yourhome, she said.“Now, I try to look for picky people,” she said. “If theyhave an eye for detail, they’re more likely to take care ofthe house.”Eventually, she found the right person.“Before signing the lease, we discussedthe details,” Herrero explained.“We made sure we both understood theterms. Spelling things out and makingclear what each person expects. Thatprevents problems and misunderstandingsfrom taking place.”FRANCISCO Collado, who ownsand rents 12 apartments and one commercialbuilding in San Pedro, east ofSan José, is an expert at renting outproperties. Most of his monthly income comes fromrentals.Like Herrero, Collado recommends hiring a real estateagent.He also places an emphasis on getting to know theprospective tenant.“The first tour of the apartment says a lot about the person,”Collado said.The key to renting properties is to keep them in goodshape, even when they’re rented. Collado hires people topaint the apartments every three years. He is also regularlyinspects the apartments to make sure they’re in good state.“If you let the apartments deteriorate, they become moredifficult to rent out,” he explained. “In the long run, it’scheaper to give them constant maintenance than to have tospend a lot of money each time you have to rent them out.”THESE same rules apply to commercial real estate, hesaid.While commercial establishments pay well, they generallyhave a higher turnover rate. To reduce the risks, it’sbest to diversify.When he has empty apartments, he can rely on revenuesfrom the other apartments and from the commercialestablishments.“Sometimes, you get lucky and everything’s rentedout,” he explained. “That’s when you benefit from thebonanza.”