Convert a Seasonal Vacation Property Into a Long-Term Rental

Convert Seasonal Properties to Long-Term Rentals

HAC’s Rent 365 Encourages Seasonal Home and Property Owners to Convert Their Home to Year-Round Rentals

Help Solve Cape Cod’s Workforce Housing Shortage

As the regional housing agency serving Cape Cod and the Islands, Housing Assistance Corporation sees many workforce professionals struggle to find long-term housing. For this reason, Housing Assistance created the Rent 365 program, to encourage homeowners to convert their seasonal rentals into year-round rentals on Cape Cod by offering a financial incentive. This program is designed to help increase stable housing options for those who live and work in our community year-round.

THE RENT365 PROGRAM IS CURRENTLY AT CAPACITY. PLEASE CHECK BACK LATER FOR UPDATES.

Who is Eligible?

The Rent365 program is currently at capacity. Please check back later for updates.
Homeowners that convert a seasonal unit into a year-round rental.
Homeowners that will be a first-time year-round landlord of the applicable unit.
The property must not have a history of being rented year-round within the last three (3) years.

What are the Financial Incentives?

Incentives are a one-time opportunity and limited to one per landlord.

1 Bed Unit*	2 Bed Unit*	3+ Bed Unit*	ADU**	Lease Renewal Bonus***
$4,000 Incentive	$5,000 Incentive	$6,000 Incentive	$10,000 Incentive	$500

Incentives are not renewable

*50% of the incentive will be paid in Year 1 and the remaining 50% of the incentive will be paid in Year 2;
Subject to a 2-year monitoring agreement to ensure unit remains a year-round rental

**60% of the incentive will be paid in Year 1, 20% will be paid in Year 2 and 20% will be paid in Year 3;
Subject to a 3-year monitoring agreement to ensure unit remains a year-round rental

***A bonus will be paid to those landlords who continue to rent their unit under a year-round lease in Year 3

Rent365 is currently at capacity. Please check back later for updates!

Supporters

The RENT 365 Program relaunch is proudly supported by Cape Associates, Inc.
Funding is also provided by Barnstable County and its Economic Development Council
License Plate Grant Program through the Cape Cod Commission.

We sincerely thank them for their continued leadership and support in making our community a better place.

What are the benefits of the landlord incentive program?

Participating landlords will receive a non-renewable monetary incentive paid out over a term or 2 or 3 years, based on the number of bedrooms or type of property being rented. The community will benefit by being one unit closer to meeting the housing needs of our year-round workforce.

How are the applications processed?

This program operates on a first-come, first-served basis. We process applications on a rolling basis. It’s important to note that you don’t need to have a lease in hand when you apply. Once your application is determined eligible, we’ll reserve your spot until your property is fully leased, not to exceed 3 months from the time your application is approved, and we receive the executed rental agreement.

How long will I receive the monetary incentive?

The Rent 365 Program offers a one-time monetary incentive per landlord. It is not a renewable program.

How long is my property required to remain a year-round rental?

Participants in the Rent 365 Program are subject to a multi-year monitoring agreement to verify that the unit remains a year-round rental after the initial lease expires. Applicants with a 1, 2 or 3 bedroom unit must rent it year-round for a total of 3 years. Applicants with an ADU must rent it year-round to a non-family member for a total of 4 years. Landlords who convert to a seasonal rental during this three-year or four-year period or decide not to rent the unit at all beyond the initial one-year lease will be required to refund the monetary incentive.

What if I recently purchased a home on Cape Cod, am I eligible?

Yes, as long as the property isn’t an existing year-round rental, you can participate in the program.

What documentation is required to show the property was a seasonal rental?

You must include one of the following:

Short-term rental excise tax bill from the Mass DOR.
Short-term rental registration. (generally registered with your town’s Health Department)
The last short-term lease for the property. (Lease must be within 2023)

Other documentation may be accepted at the discretion of the Rent 365 program administrator.

Does Housing Assistance have a list of pre-vetted tenants that I can pick from?

No, we do not screen tenants for suitability; that is the owner’s responsibility. However, we can recommend “best practices” throughout the tenant selection process.

Will Housing Assistance advise me on what rent to charge?

Ultimately, the amount you charge for rent is up to you, the owner; however, we can discuss rental pricing strategy and provide rental comps in your area.

Are there any restrictions on who I can rent to?

No, but you must follow Massachusetts Fair Housing laws.

Landlord Resources

Tenant Screening Getting Your Unit Leased Requesting a Rent Increase Basic Inspection Checklist Unit Quality & Rent Reasonableness Landlord Resources

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Tenant Screening

“Screening tenants is probably the most important task a property owner undertakes.” These words of wisdom come from Property Management Manual for Massachusetts Rental Owners, 4th edition, published by HAP, Inc. Too often we hear a landlord lament renting to someone who “seemed like such a nice person” without checking references or credit and then regretting that decision. The following are excerpts from the HAP property management manual chapter on tenant screening. Procedures for obtaining a manual are included at the end of this information.

In general, an owner wants to find a tenant who will:

Pay the rent in full and on time.
Keep the unit clean and not cause damage.
Not disturb the quiet enjoyment of other building occupants.
Not engage in illegal activities.
Abide by the rules established for the building and other terms of the tenancy.

Getting Off on the Right Foot

Your decision about whether someone will be a good tenant must be solely based on real and objective criteria, and each applicant should be considered in a fair and consistent manner.

First, establish your selection criteria. How many people do you want to allow in your unit? The State Sanitary Code will give you guidance on required square footage of living and sleeping space.
Second, what rent will you require? This will help you determine approximately what income the family will need to earn in order to afford the rent and utilities you set.
Third, establish any other restrictions or rules for occupancy. This should be written down and provided to each potential tenant. Remember, to comply with fair housing laws, every applicant should be treated fairly and uniformly.

Screening Applicants Takes Time

Although checking references and credit information may seem unnecessarily time-consuming, it will help you find the best possible tenant and is virtually guaranteed to save you money in the long run. A summary of the types of checking you should do follows.

Can the applicant afford the rent?

Determine whether there is a dependable source of income. You can verify if someone is employed where he or she claims to be. Be sure to check with the applicant’s previous landlords for a payment history. Note that the subsidy will be adjusted up if the client’s income decreases.

What is the applicant’s rental history?

Ask previous landlords if the applicant paid the rent on time, whether there was damage beyond normal wear and tear, and whether there were disturbances or difficulties getting along with neighbors. Note that this information is subjective and therefore might be inaccurate. The best protection is to check with at least the last two owners from whom the applicant has rented. Housing Assistance can provide you with the name of the client’s last landlord. Take steps to ensure you are actually talking with a property owner and not just a friend of the applicant.

Has the applicant routinely paid his or her bills?

If so, it’s a good bet the rent will also be promptly paid. You can check this with a traditional credit bureau, or you can use a specialized agency that provides tenant screening services. Be sure to obtain the applicant’s release so you can legally perform this investigation. Remember, however, they are only reporting data they have obtained from other sources, and the reliability is only as good as these sources. There are many reasons – not necessarily negative – that some people have not established a credit history. Ask these applicants to help in obtaining their history, perhaps with a utility company or an employer.

What other factors should be weighed?

You are required to make reasonable accommodations for disabled individuals. This may involve seeking alternative sources of information about their ability to meet tenancy obligations. The basic rule of thumb is that the accommodation be reasonable and realistic. If it involves costly renovation, it might be acceptable to ask the tenant to pay for it. But remember to use caution in inquiring about disabilities, as it can be illegal to ask about certain categories protected under state and federal law.

Basic Tenant Screening Checklist

Contact previous landlords, not just the current one; inquire whether rent was paid promptly and what condition the unit was left in. Housing Assistance can provide you with the name of the tenant’s last landlord.
Run a credit check.
Drive by the tenant’s current unit to see how they care for the property.
Ask your tenants if they are in good standing with the utility companies.
Familiarize yourself with Massachusetts General Laws regarding tenancies. An excellent reference is the Property Management Manual for Massachusetts Rental Owners published by Hampden Hampshire Housing Partnership. Contact our Leased Housing Department to purchase this manual.

Ask tenants if they have ever had difficult relationships with their neighbors and how they handled it.
Prepare your lease with care. Declare how many people may reside in the unit and list prohibitions, such as smoking and pets.
Always walk through the unit with the tenant before move-in. Prepare a “Statement of Condition” report, which you and the tenant should sign and date. (NOTE: This statement is required by law if you collect a security deposit.)
Photograph or videotape the condition of the unit before move-in.
Give your tenants the name and phone number of someone to contact for emergency repairs.
Show your tenant where the fuse box and other important utility areas are located.

Getting Your Unit Leased

As a property owner you are required to screen and select a tenant for your unit. Once you’ve checked references and completed your tenant selection process, you’ll complete the Request for Tenancy Approval (RFTA). This form notifies Housing Assistance that you and the tenant are ready to start the lease up process. The tenant will bring this form to you for review and signature.

Once the RFTA is received by our program representative, an inspector will schedule a date and time for the housing inspection. The inspection will be scheduled no later than 10 business days after receipt of the RFTA. The purpose of this inspection is to ensure the unit meets Housing Quality Standards established by the U.S. Department of Housing and Urban Development. Some of these requirements are found in Basic Inspection Checklist.

While awaiting the results of the inspection, the program representative will be reviewing the tenant’s income and requesting any needed documents. The program representative will also be in contact with you either by mail or phone to discuss the process and request any documents needed from you. Such documents include a W-9, a letter of compliance (for lead paint) or building permit if a child under the age of 6 will be living in the unit, and a copy of the lease you will use. The lease must be the same lease you use for any unassisted units you rent. If you do not rent other units, we can provide you with the Section 8 Program Lease. Whichever lease you use, the HUD tenancy addendum will be attached.

The program representative will also discuss the maximum permissible rent and a rough estimate of the tenant’s share. Final amounts cannot be determined until the inspection is complete.

After the unit is inspected, the inspector will notify you of any needed repairs. These repairs must be corrected before the lease and Housing Assistance Payment (HAP) contract can begin. The HAP contract is the document signed by Housing Assistance and the property owner, which outlines both parties’ responsibilities and the amount Housing Assistance will pay each month toward the contract rent.

Once the unit passes inspection, the rent you requested is reviewed to ensure it is reasonable compared with similar, non-subsidized units in the area based on size, type, and other factors. Now it’s time to finalize and calculate the rent for your unit. We do this based on the tenant’s income and estimated cost of utilities, rent-comparable data, the results of the inspection, and the payment standard established by HUD. You will receive a portion of the rent each month from the tenant, and the remainder from Housing Assistance as the HAP. These combined figures equal the contract rent – the total amount you can charge.

The entire process from receipt of the RFTA until you receive your check can initially take up to 4 weeks, but often happens sooner. But after that, you will receive the HAP by the first of the month. The program representative is available to both the property owner and the tenant if you have questions regarding this process.

Requesting a Rent Increase

Rent increases can be requested annually. This usually occurs on the anniversary of the lease and contract. Here’s how the process works:

No later than 60 days before the effective date of the increase, written notification must be sent to the tenant with a copy of the letter to your Housing Assistance’s program representative.
Once the notice is received, the program representative will determine if the requested rent is reasonable based on area rents in the private market of similar size, type, and amenities, as well as the condition of the unit.
The program representative will also ensure that the unit has passed inspection within the past 12 months. If a unit has not passed inspection, we are unable to approve a rent increase until it receives a passing report.
Once this is complete, the program representative will notify the owner and tenant in writing if the increase is reasonable. It is then up to the tenant to decide if they can afford to remain in the unit with the higher rent or give proper notice to terminate the lease and move.

The increase in the contract rent most often increases the tenant’s portion of the rent, not Housing Assistance’s portion. This will occur if the contract rent plus the estimated cost of tenant-paid utilities exceeds the applicable payment standard (APS). The APS is based on the U.S. Department of Housing and Urban Development’s fair market rents.

The APS for a two-bedroom unit in Hyannis, for example, is $1,664. This amount includes the estimated cost of utilities. If the contract rent plus utilities exceeds this amount, the tenant will absorb the excess.

Many property owners are confused when they do not see an increase in the Housing Assistance Payment (HAP), after they’ve been granted an increase. If the requested rent falls at or below the APS, Housing Assistance’s portion of the rent would then increase.

Annual rent increases will also be considered after the anniversary date of the lease and contract have passed. For example, if the property owner forgets to submit a request, the increase will be considered after a 60-day notice is received by both the tenant and Housing Assistance. This allows sufficient time for the tenant to determine if they can afford the increase, and for Housing Assistance to process the information.

Basic Inspection Checklist

Here are 18 items to help you make your to-do list.

Units must be vacant and clean with utilities on.
All windows and sliders in the living space must have good screens.
All openable windows must operate properly without the need to be propped.
Switches and outlets need cover plates.
Each level (basement, first floor, second floor, attic) must have functional smoke detectors.
Appliances should be in working order.
Window and door locks should be working. No double-key deadbolts are allowed on exterior doors.
Stairs, ramps, and porches need proper handrails and balusters. Bulkhead stairs need a handrail.
No exposed electric wires are allowed.

Replace voids in the fuse box.
Check under kitchen and bathroom sinks for leaks.
Eliminate tripping hazards, such as frayed carpet and extension cords.
No flammable material such as cardboard, paper or plastic bags, laundry, wood should be within 7 feet of the furnace.
Gas engines such as lawnmowers and mopeds cannot be stored in the basement.
No unregistered vehicles are allowed on the premises.
Space heaters are prohibited.
Fireplaces and wood/coal chimneys must be inspected and cleaned.
A letter of compliance (LOC) is needed if the unit was built before 1978 and a child under the age of 6 years will occupy the unit.

Unit Quality & Rent Reasonableness

HUD requires Housing Assistance to determine the quality of a unit as part of the Rent Reasonableness process. Our inspectors, as part of the HUD Housing Quality Standards initial inspection of a unit, will conduct a subjective, unbiased evaluation of the unit and assign it a grade. This grade is used to determine the contract rent. Following a generalized version of the grading criteria we use to determine a unit’s quality. Not every unit fits every grading point. These are just some of the considerations each inspector weighs in determining quality.

“A” UNIT: Excellent Condition, New or Substantial Rehab

Excellent condition, typically new construction or substantial rehab.
Quality workmanship and materials; primarily new materials are used; repairs are often “invisible.”
For turnover, owner routinely repaints, shampoos carpets, cleans entire unit.
Appliances are new or in very good condition.
Common areas and exteriors are well maintained and attractive. Amenities may include disposal, dishwasher, extra bathroom, large rooms, washer/dryer hookup or washer/dryer in place, home security devices, patio or deck, owner-supplied utilities, exceptional neighborhood qualities.
There is evidence of on-going preventive maintenance and quality repairs. Maintenance workers are trained to repair more than just what is cited on the inspection report.
Owner/agent practices good tenant screening and is responsive to tenant and maintenance problems before they become serious. Owner maintains a regular presence on the property.

“B” UNIT: Well Maintained, Good Quality Older Unit

This unit might be an “A” except for the lack of amenities or quality of newness that makes the “A” unit more appealing. Evidence of recent renovation or good quality repairs – mix of new and used materials, repairs may still be “visible” (rough surface, holes not filled completely, uneven seams, etc.).
Exterior and common areas well maintained. At turnover this may be somewhat less well prepared than the “A” unit, “broom cleaned” but not always repainted, shampooed, washed.
Has at least one feature or amenity that adds to desirability but otherwise has less-than-ideal conditions.
Overall maintenance is above average but generally is reactive rather than preventive.
The “B” unit may be one in transition, in either direction. Newly acquired properties are often B units and depending on commitment and resources of the new owner, may improve to “B+” or better or deteriorate to a “C” unit.

“C” UNIT: Average Condition Older Unit, May Be Deteriorating

This unit is in average condition, but with normal occupancy conditions typically results in a number of fail items during the year. Generally passes inspection only after a number of what should have been normal maintenance repairs have been cited.
Typically left-over, lower grade materials are used; possibly swapped from one unit to another as needed. Workers repair only what is specifically cited.
Repairs often “visible,” such as unsanded surfaces, unfinished work at seams, holes cut for placement of fixtures left as is, paint spills, imprecise painting on woodwork. Repairs often do not hold up for more than 6 to 8 months.
Move-in condition is mediocre – needs cleaning, shampoo, painting, removal of trash, etc.
Appliances and unit features are dated but functional, rooms and closets are of adequate size, but there is nothing special. There are no extras that might enhance desirability, such as a porch or deck, large and well-maintained yard, large or extra rooms.
Little on-going preventive maintenance. Owner typically responds only to problems reported by the tenant or inspector.
NOTE: A “C” unit may be one that would otherwise be a “C-” except for filling a specific and difficult need to meet, such as handicapped accessibility. In such cases, these units will be carefully monitored as marginal units to ensure that conditions are improved over time.

“C-” UNIT: Marginal Conditions

This unit cannot be rated a solid “C” but is not completely unsatisfactory. To pass inspection as a new lease-up, the owner must make sufficient improvements to qualify the unit/property as a “C” or better.
Little or no ongoing maintenance except in response to serious repair need; exterior and common areas typically neglected.
Unit interiors rarely repainted, little upgrading over time, minimal amenities/heat/electric/plumbing for family’s needs.
Repairs often of poor quality, and problems recur within a period of weeks or months.
Sometimes a hazardous or marginal condition results from the repair and becomes a new “violation” upon re-inspection.
Common use of old, faulty, mismatched materials.
Poor tenant selection. Owner overly tolerant of tenant problems. Little presence on the property, so emerging and chronic problems are not discovered.

Landlord Resources

This is a basic outline of what is covered in more detail in the HAP manual, which has 20 chapters of valuable information for landlords. It is to every property owner’s advantage to buy and read this guide.

If you want to purchase a copy for $25, contact:
HAP Inc.
322 Main Street
Springfield, MA 01105
Attn: Stephanie Oullette

Stephanie can also be reached at 800-332-9667, ext. 1612.

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