Property manage vs sublease & some other concerns

I lived at a property about 3/4 of a mile from where my wife and I recently purchased our first home (moved in January). Our landlord was a real piece of work and ended up getting thrown in jail from before Christmas 2016 until he was released end of June.

Not knowing (at the time) that the property owner was not the same person as the landlord (who was subletting to us without the knowledge of the property owner), I kept an eye on the house after we moved out to make sure nobody was squatting or doing anything they shouldn't be…it's on my way home from work anyways. Found a note from an agent of the property owner asking for a phone call to talk about "back rent" I told him all the back story on the house and that we hadn't been living in the place since January. Landowner told me he hadn't been paid for rent since October and (at the time of this conversation) I told him that the landlord had been locked up and no idea when he would be released. He told me that he was being paid rent of $600/mo when landlord was charging us $1000/mo rent, and that his lease was terminated by his nonpayment of rent during incarceration. I told him I understand that nobody would want to have an asset that could be making them money sitting idle and that I'd be interested in a similar arrangement to sublet so that we could both make some money at it. Probably worth mentioning that I'm in Northern Colorado and the landowner is in Texas, and I've verified that he's that actual landowner via the county assessor's website.

He called back a bit later to talk some more specifics and that he did some research and that he thinks property management companies get 10% of monthly rent to take care of what he can't do from out of state and collect rent. Knowing that I was a very low maintenance renter but not everyone is, 10% of a thousand bucks means a hundred a month, and it doesn't take very much time to make that proposition cost more time than it pays in dollars, especially when the landlord who went to jail was making 4x that and doing fuck-all for maintenance on the property. And I told him as much, that I would be more interested in doing a sublease with his blessing to reap more money while also expecting to do more maintenance/upkeep type work to the property. He didn't seem to have a problem with that suggestion, but said he wasn't sure how it would be handled on the legal side, so this begs a few questions I'm hoping someone here can give some guidance on. Long term I'd love to buy the property to use as a rental property but there's not enough extra dollars in the savings account to put a down payment on a second home a half year after buying our first home and making some improvements to it.

1) How does property insurance work in a sublease-type situation? I think that the property owner has some basic homeowners insurance, but if I entered into an agreement to lease from him and sublease to someone else, how would major damage from a situation like a fire caused by the renters be handled? I'm guessing our former landlord didn't do anything in that department but I'm more likely to try and do things right rather than get bit in the ass if a renter causes damage.

2) are there any good resources for sample lease agreements for these sorts of situations?

3) How are renters vetted in this sort of situation? If we used a background check service would I be expected to pass that information on to the landowner or just keep for my own records? Not sure how privacy laws may apply in this situation.

4) Any other concerns I should be paying attention to or questions I ought to be asking?

More real estate tips at Program Realty Wix site


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