ADU Property Management
Tips and resources for managing and renting your ADU effectively.
Renting and managing your ADU
You’re ADU is complete, what’s next? Pricing the rental, locating a tenant, collecting rent and property maintenance. Below are resources for learning to become a landlord, hiring a property manager and fair housing laws.
Managing a property is a big responsibility. To understand the tasks of managing an ADU, we’ve compiled a list of steps to rent out an owner-managed property. If you already know you need a property management company, see “Where can I find a property manager to take care of some of these steps for me?” further down this section.
Pricing The Property
Arguably the most important step of managing a property is first pricing it relative to the market, and ensuring a return on your investment. Leadership Bend Class of 2022 created this free guide to building an ADU with the goal of increasing affordable housing. Please consider offering your completed ADU as an affordable long-term rental unit for our local workforce. You can find out more about Bend Chamber of Commerce’s commitment to increasing affordable and attainable housing here.
To properly price your ADU, you need to conduct market research of your area pricing and area income. You can find up-to-date average rental prices at sites like Zumper, a rental pricing calculator at “Rent-O-Meter” and further resources: Central OR Rental Association.
Create an Income/Expense Analysis so it’s profitable for you and affordable for your tenant (see Financing and Costs page).
Listing The Property
Create a marketing write-up that adheres to Fair Housing laws, while setting clear tenant criteria. Use other listings as a guide for attracting renters.
Choosing Where You Will List Your Property
The best way to reach the local workforce is through local publications such as Bend Source Weekly and Central Oregon Classifieds. Other online services include craigslist, Facebook Marketplace, Zillow, and Furnished Finder, among many more.
Accepting Applications
Accept application fees to pay for your expenses to perform background checks, credit checks, rental history checks, etc. Under the Fair Credit Reporting Act, you must use an approved Consumer Reporting Agency to obtain a criminal background check on a potential tenant. It’s also a good idea to contact the applicant’s employer to verify their stated wages.
Credit reports can be obtained online from the three major credit reporting bureaus: TransUnion, Experian and Equifax.
If you deny an applicant because of negative information on a credit report, you must send the applicant an “adverse action” letter, which informs the applicant of three things: the reason for rejection, the name and address of the agency that reported the negative information and, the applicant’s right to obtain a free copy of the report by requesting it from that agency within 60 days.
Contact the applicant’s previous landlords to verify tenancy and adherence to lease agreements. And remember, you must respond to all applicants who apply and pay the application fee.
Choosing A Tenant
Again, we urge you to uphold the Bend Chamber of Commerce’s objective of providing affordable housing. When choosing a tenant from among the applicants, you must adhere to Fair Housing Laws. These govern how you advertise your unit, how you create the lease, and how to conduct yourself in the property owner/property renter relationship. Adherence to these laws protects you from lawsuit and provides dignity and respect to your tenants.
Creating The Lease
A properly drafted lease sets clear expectations of responsibilities, both owner to tenant, and tenant to owner. It is recommended to use a Rental Lease Form created to comply with all local, state, and federal laws. You can find examples here: Rental Housing Alliance – Landlord / Tenant forms.
You do not need to form a legal entity in order to collect rent money, however, for liability purposes, it is recommendable. Please consult with your lawyer before doing so.
- To register a legal entity/business in Oregon: State of Oregon — Register a business
- To file your business taxes, you will need an Employer Identification Number (even if your business won’t have employees), which you can do for free here: IRS — Apply for an employer identification number
Steps for this part of the process if self-managed:
Collecting Rent
- Accepting federal rental assistance (see “Housing Choice Vouchers” below)
- Accepting credit cards, ACH electronic funds transfers, etc.
- Setting up autopay
Maintaining the Property
- Providing routine maintenance
- Conducting periodic inspections
- Enforcing maintenance agreement stipulations
Giving/Receiving notice to vacate
- Conducting evictions in accordance with local and federal laws
- Giving notice of property sale to new owner
- Receiving notice of tenant intent to vacate
A key to expanding access to affordable housing is through The Housing Choice Voucher Program, also called Section 8. This enables very low-income households to rent units from private landlords with federal subsidies. You can find out how to receive these federal subsidies by visiting Central Oregon Regional Housing Authority (Housing Works).
On-time reliable and guaranteed rental payments
Housing Works pays a set portion of your tenant’s rent directly to you on the first of each month. The renter pays the difference.
Potential for higher occupancy and lower turnover
Participating landlords broaden their pool of prospective tenants. Since voucher holders sign a one-year lease, many become long-term, dependable residents.
Standard charges and fees
The same security deposits and late fees in effect for private-market renters are applicable to voucher renters.
Learn more about Housing Choice Vouchers at housing-works.org.
You can find a local property manager in the Bend Chamber Business Directory. Here is a more compact version of that list (including only residential property management companies):
As always, check with your HOA to see if it’s allowed. You can find more resources here: Short Term Rental Program.
- Central Oregon Rental Owners Association
- Fair Housing Council of Oregon
- Oregon Eviction Moratorium FAQ (Portland site organizing Oregon state resources)
- Oregon Landlord Relief Program
- Oregon Law Help— Landlord and Tenant Law
- Oregon Office of Economic Analysis— Rent Stabilization
- Oregon Rental Assistance
- Oregon State Bar — Landlord and Tenant Law
The Fair Housing Act protects people from discrimination when they are renting or buying a home, getting a mortgage, seeking housing assistance, or engaging in other housing-related activities.
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