Renting Out an ADU

Renting Out an ADU: How to Find and Screen Renters

For many Hawaiian homeowners, the opportunity of building and renting out an ADU is quite exciting.

Rather than having to buy property, you can build a new little home right in your backyard and open the doors to a family or individual in need of affordable rental housing.

The question is: How will you go about it?

There are actually several approaches to finding a renter. The good news is, this task should be incredibly easy when there’s such a high local demand for any rental housing.

So, we’ll go in order from the easiest to the most involved techniques on how to find and screen potential tenants when renting out an ADU.

1) Put Out a Sign

The market for rental homes is so tight right now that some families are simply watching for a chance to rent a new ADU as fast as homeowners can build them.

This means that there’s a good chance that a sign in your front yard indicating you have a rental home ready  will bring in applicants with a quickness.

In fact, depending on where your home is located on Oahu and how much traffic flows through your neighborhood, you may get an onslaught of applications you’ll have to choose from. Or, you may just get a trickle of people.

Either way, it’s an easy way to bring potential tenants to your door.

2) Ask Friends and Family

With so many people looking for a home right now, almost everyone on the island knows or is related to someone who’s situation could use an ADU opportunity.

If you want to dodge the mountain of applications and extend a personal offer to someone you know or a friend of a friend, asking around is a sociable and helpful way to find a family in need.

3) List Your ADU Online

There are a dozen or more online real estate listing sites. Some of them are specific to Hawaii and some are popular nation-wide.

Zillow is currently the top-dog in US real estate websites and this is where most people find themselves when looking to buy or rent a home.

You may also consider listing on ADU-specific websites built for the purpose of finding residents for new Hawaiian ADUs.

4) Hire a Listing Agent

If you want to pay a professional to find you ‘the perfect resident’, you can always hire a listing real estate agent. They will put your home up on a variety of online sites and on the private real estate network shared by agents across the country.

Therefore, a much larger number of renters will have a chance at applying and these applicants will be curated before you see them.

5) Connect Through Social Media

Finally, don’t forget that your own personal social media account could be the key to finding the perfect renter.

Reach out through your online connections or check with the members of locally based groups to find someone in need of a small rental home.

Social media is a great approach because it gives you the chance to socialize and get to know your potential renters early in the process and find someone you can be friends and neighbors with.

Screening Renters Once the Applications are In

There is a good chance that the moment you open up your ADU to possible renters, you will wind up under a mountain of eager applications.

Should this happen, it’s important to understand two key factors: Anti-discrimination laws and tenant screening. It’s always a shame to have to turn people away but you’ll need to understand how to form your reasons to stay legal and fair.

Anti-Discrimination Rules

Because you only have one ADU, you’re essentially free to pick whoever you want to live there.

However, you are not allowed to reject an application based on race or skin color, national origin, religion, disability, gender (including sexual harassment), and family status (including renters under 18).

Tenant Screening

Tenant screening, on the other hand, allows you to reject someone based on a criminal background check, unsteady income, history of rent non-payment, bad credit history, bad references, and unauthorized pets.

Finding a Renter You Like

Of course, the most important factor when seeking a resident for your new ADU is to lease to someone you’ll enjoy living near.

For older homeowners, you may be the perfect match for downsizing retirees looking for a quiet place to settle down. If you are younger or have a very active family, you may mesh better with another family or a young couple just getting started.

You may even be approached by small groups of friends looking to pool resources for a shared rental property.

Regardless, you are essentially free to choose whoever you feel would be both a responsible tenant and an enjoyable new next-door neighbor.

Ideally, you will find someone who can pay rent steadily, interact pleasantly with your family in passing, and agrees happily with your lease terms. But once you find a renter, you’re finally ready to become a landlord!

For more tips on designing, building, and renting out your backyard ADU, contact us today!

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