the wife and i just purchased our first rental property. i am sure many of you have had some experience with renting out a house. what would be some of the things to watch out for? being new i have had some hard nose advice. i've heard don't give them an inch and the day they are late with the rent start eviction proceedings. any information will be taken into account. also the laws that i must abide by as far a renting, collecting and eviction and property maintainance. Doeboy

Study the laws before you sign a lease with anyone. Once they are in, it may be very difficult to get them out. I used to have a duplex that I rented. First month, last month and a security deposit - Period.

Check references!

I think you'll find specific laws govern some areas. Background check and credit report are mandated. There are forums that discuss these subjects at length. A good lease agreement is imperative and a RE attorney is invaluable in setting up an ironclad agreement. A deadbeat can be extremely difficult to remove in some areas. Decide on a figure and allow them to spend that amount on emergency repairs. It will make your life easier. I've heard of having the rent paid direct to your dedicated bank account.
good luck,
oldogy

Do that and you'll be evicting every tenant you ever get.

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'Merica!

i do feel sorry for you. life is about to get much more difficult. if you ever enjoyed people in general, you will get over that quick.

As a couple people I know have told me that what ever you do, never rent to anyone on HUD assistance. I friend of mine rented to three successive families that all had HUD, all three were evicted because of late rent, damage to the apartment, etc. My parents rented their house out, and 3 out of the 4 tenants were late, damaged the place, had pets when they were not supposed to, etc. I know that after I left the apartment I was in for 3 years, the landlady, who was one of the nicest people I knew and was quick with the repairs like they lived next door, had three tenants in the same apartment in only 4 months. The first left after two months because they just didn't feel like living there and would not pay, apparently it was like a flophouse for them. THe second was a smoker and had pets, a no-no. The third was tossed and I think the fourth. I can tell you that even if I was to rent out my guest cottage, I wouldn't because of all the hassles I have heard with tenants from everyone else.

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Vaya con Dios

I'll NEVER rent property again. We had a nice rental house on 14 acres that we rented to a couple of college professors. Nice people, we thought. The first thing they wanted me to do is build them a barn so they could keep a horse. I told them if they wanted a barn, they could build it themselves, even showed them the only place I would allow it. That was not acceptable to them and the subject never came up again. What they did instead was remove the back door of the back bedroom, built a ramp, and turned the third bedroom into a horse room. They also put rabbit hutches in the other bedroom. It took legal action to get them out, and in the process, they totally trashed the house. I got no compensation at all.

I am in the process of GIVING AWAY two houses that I have been renting out for the past 5 years. I would rather them be off my land than to fool with all that goes with renters, air conditioners, leaking roofs, stopped up plumbing, insurance, taxes, etc. A local guy who takes old houses, fixes them up, then sells them on a lot of HIS will jack 'em up and haul 'em off (praise the Lord!). Maybe if I were younger it might be worth the hassle...maybe. But today's renter seems to be much different than the average renter 40 years ago. And the laws are virtually all in the renter's favor.

Sorry I could not be more upbeat on the subject.

Rafter-S

Be prepaired to see how the other half lives,and I dont mean the rich and famous.Best of luck to ya.

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Take it easy. Chris

Is being an "absentee landlord" and relying on a realtor to pick your tenants. I did this in the early 80's when my job situation changed and I had to move out of state. I planned on returning to Tampa, because at the time "The good life got better every day". That is also a thing of the past.
Anyway, I got off relatively lucky, the folks apparently did not know how to use an oven but did fry everything. The grease was so thick on the cabinets, it rolled up on your fingernail. The bathroom had had all the Cuban boatlifters bath there.
Other "minor problems" of course.
The only silver lining was that I sold it at the peak of the market, after repairs and degreasing, of course.

Quote the Raven "Nevermore!!!"

The only property owners I know that are doing well renting property own a trailer park.

If the trailer is too trashed, it gets hauled to the dump and another gets put in its place (cost 2 to 4 thousand for the swap).

...and the only one I know doing well is a guy who rents shacks to Mexican laborers, most of which are illegal. He has this Mexican guy named Francisco that is his right-hand man--the meanest dude south of Canada--who is the "collector." The landlord has virtually no problems thanks to Francisco. When someone gives the least problem, they suddenly and unexplainably "go back to Mexico"...at least that is the story.

See what comparable rentals are renting for in the same area. Do not charge any less to attract renters. Because in most cases you will attract riff raff. Not always, but it will happen. Do a credit check AND get references. Check them both. Some landlords and property management companies even do a criminal background check. Some renters move from place to place after they have screwed a landlord. They know what they can get away with. Do not trust anyone. Can I make payments on the deposit? NO! Can I do my own maintenance and take it off the rent? NO! Don't give an inch at any time.

Sometimes, not always, but sometimes it's nice to have a property management company do the work for you. If you have more than one rental property it's a big help depending on what they charge.

When you make repairs or upgrades, do not use the most expensive materials or hardware. Your renters will not take of it.

Give them a grace period to pay the rent. If they are a day late them call them on it. If they are consistently late check on a late fee if it's legal. Work with them if you can. If it gets to be a pain then get rid of them. If a renter was always late but paid consistently before the tenth of the month, I would'nt worry too much if they were a good tenant. For those that live from paycheck to paycheck, paydays don't alway fall on the first of the month.

Drive by your rentals on a regular interval. See how things looks and point out things that should'nt be. Show them that you are actively interested in your property. Some landlords rent and forget. And they wonder why they have problems.

Good luck!

We rented out a house in Memphis. First 3 renters were great - No problems for 5 years. The last folks renting the house got transferred Out West somewhere --- As soon as they moved out squatters moved in.
It took 1 entire year to get them out! I couldn't believe it.... The Memphis PD wouldn't do ANYTHING and the Shelby County Sheriff couldn't do anything without a court order.
Judge Joe Brown (b4 TV) ordered them out and awarded us back rent (they didn't show up for the trial, hearing, or whatever it was). We not only didn't get a dime from them - They took all of the copper from the house with them (wire & plumbing). Also painted one room black and painted the hardwood floors. The rest of the house was trashed. The police seem to have better things to do and told me its a civil matter. We've never been able to find these jerks.
NEVER AGAIN !!!!!!!!!!!!

If it weren't for my lovely wife I would have been serving 20 to life over this - I REALLY wanted to just shoot them. There was NOTHING that could be done legally that didn't take a long time and the squatters knew it. I would be getting out about 5 years from now, so I guess she was right.

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In dog years I'm dead.

I've got a friend of mine who owns six fourplexes. He rented them to Section Eight folks for awhile for $400 a month. He did alright at first until he realized how bad the apartments were getting trashed. Then he met Pablo who presented him with a good business plan. Pablo told him for 10% of the take and a free apartment he would take care of the apartments. They are now full of Mexicans who work at a local chicken plant and they pay by the head instead of by the apartment. Most of the apartments have more than ten people living in them. These folks can't cash a payroll check because they can't get an account with the bank so Pablo takes care of that too for only a 5% cashing charge. He also deducts for repairs when cashing the checks. Not only are the apartments now paid for, but my friend makes far more than he used to on them and only has to go see Pablo once a month.

wow sound like renting is for the birds. we are going to give it a try my wife is a very good judge of character well better than me. we have talked to several people that have rented for years and i am hopeful that we find a good renter. from what i have read a slum lord is not such a bad person. he probably started off with some really nice property. keep the comments coming i would like to ready for anything. Doeboy

depending on where you live, you can only access your rental while tenants live there for certain reasons. one reason is almost always repair and upkeep and safety. so every 6 months, about every spring and fall or summer and winter equinoxes, go change the batteries in the smoke detectors. gives you a reason to pop in (with adequate 24 hours or whatever notice) and gives you a reason to check out each room. because you put smoke detectors in each room right ? even if they're paying on time, you dont know if they're growing pot or sacrificing animals or whatnot.

personally im not a fan of single family rentals. i think you get more bang for your buck in 2-4 or larger units. if you have a vacancy, your down 1 month or so to get it cleaned and re-rented. in a 2-4 your probly not having the place vacant 100% at any one time.

I have had rental properties in California, Arizona, and now in Georgia. KNOW YOUR STATE LAWS! I suggest newbies join Mrlandlord.com.

How I do it:

I have a prescreen telephone call list with pertinent questions and minimum requirements, such as:

Why are you moving? (No prior evictions).

My renters must have a total income of (2.5-3 times) rental amount, is this a problem? ( I have used cosigners).

How many people will be living there?

How long have you been at your present place of employment? (2 years min.).

I run a credit check, and contact all past employers; are there any items that may disqualify a good applicant that could be explained before hand? (No bankruptcies).

etc. Be conversational, they will often eliminate themselves.

Keep this WRITTEN sheet FOREVER! I have been "shopped" by HUD, and discrimination is a SERIOUS charge.

My ratio is:
10 phone calls=2-3 appointments=1 showing.

All adults must fill out an application COMPLETELY. I have had qualified applicants that just didn't "feel right". Nobody has ever filled out my application completely, and I have used this as a reason for rejection.

Section 8 is for EXPERIENCED landlords only!

I only rent month-to-month. It's much easier for everyone to go their seperate ways.

There is much, much more, but I must get ready for the salt mine. Please post any questions, and I will hopefully be able to help, or point you in the right direction. I am on many forums, and never check PMs here.

The best of luck, and welcome to a new, exciting way of life, my friend!

My career of the past 25+ years is in multi family property management (subsidized and conventional) and the absolute best advice I could give you is DON'T!!!!!!

Have you ever washed a rental car?I rented a house,in the '80's,out to a friends brother,who i knew[i thought!].He trashed the house,etc.I ended up getting him out with a shotgun.Nowdays,i would go to prison and he would own the house free and clear.Never again!!!Check your state laws.Good luck.

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WALSTIB

Landlords are like boaters. The happiest days in their lives are the day they buy and the day they sell.

......moon

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NRA Life Member

I have been in the Property management business for 2 years and I have learned, 1. verify all the info the prospect gives you. Some tenants will use a friend or relative as a prior landlord. 2. Do not ever let tenants do their own maintenance. 3. Check with your homeowner insurance carrier to see if any specific breed of dog is not allowed. We do not rent to Pitt bulls, Rotweilers, chows, akidas, or wolf hybreds. 4. Here in Arizona, we have a Landlord tenant act. see if your state has something similar and adhere to it. Beware of discriminating. Be firm but fair and good luck.

I know! They are notorious deadbeats!


I manage an apartment building. Have your prospective tenant sign a release for a credit and criminal background check and run them. You can sign up on TransUnion.

Also, I do rent to HUD people (senior citizens) and encourage my tenants to sign up for HUD. The good news is that you're guaranteed get most of your rent paid every month. The bad news is HUD is very strict about property conditions and run annual inspections which you're accountable for.

Clearly written rules are also necessary and will forestall most misunderstandings down the road.

SELL IT NOW!
Seriously, you are in for endless grief. For every good tenant there are 10 that you don't want to meet again. Had one "ideal tenant" that less than a year later took up with a druggie boyfriend, illegally moved him into the house, both lost their jobs, quit paying any bills, did thousands of damage, and had to be forcibly removed by the Sheriff.

If you think you can evict someone for being a day late, you are hopelessly out of touch with managing property and don't have a clue. Quit before you learn the hard way.

I used to be a slum lord. I actually have a degree in Bus. Admin and coursework related to the legal ways to rent, document things, etc to avoid problems. That way doesn't make much money. Basically you need to decide if you want to be do things on the straight and narrow or the shady way. Both have pros and cons. We used to rent to Section 8 people, ex cons fresh out on parole, drug dealers, etc. Drug dealers are often good tenants, since they pay with cash up front. A lot depends on how near your property you'll live and whether you care what happens to it. In general, no good ever comes from caring re:tenants. I took to wearing body armor myself, which was oddly handy and reassuring when it came to dealing with the folks that I'd rent to.

Assuming you want to do things sensibly, incorporate and put the rental under the corporation. Find out if there is lead based paint in the house. Sign up for Prepaid Legal, it'll help, since they answer questions. Have everyone fill out an app and hold everyone to the same standards.

I rent two places to some elderly ladies in my church. Even though they are nice silver-haired Christian ladies, they worry the **** out of me constantly. It is always something. Today, little old lady #1 found 6 acorns in her shoes in the closet and wants the alleged squirrel found and evicted immediately. Yesterday #2's dog caught a mouse in the house. The day before, the 30 gallon water heater ran out of hot water during #2's granddaughter's hour-long recreational shower.

I told the wife if these ladies ever leave, I will burn down both places and let the land sit fallow.

Lots of good points here. I'm a Realtor and a landlord, and I'm happy to say I've had mostly good luck with mine (I'm knocking on wood as I say that). I've even had several tenants pay off the remainder of the lease when they left early, and one who paid rent for several months until I found another tenant. I've had one HUD tenant, and she was fine.

Success is related to several things, most importantly location, location, location. Old cliche, but true for the most part. If you have a run down house in a slum area.....you know what to expect. Smaller, moderately priced, well built homes in respectable neighborhoods are more profitable.

A few things I've learned:

1) Get the book, Every Landlord's Legal Guide, and learn what laws apply in your state.

2) Plan for the worst

3) Never allow pets of any kind

4) Plan ahead and cover every issue you can think of in your lease. What's in writing is all that matters when you're sitting in front of the magistrate. Go over it in detail with all tenants, and let them know you will follow it to the letter, and expect full payment of the lease, even if they leave next month. Get a parent or other co-signer any time you can find reason to.

5) Provide for routine inspections with suitable notice

6) Provide for suitable late fee after 5 days. Most will not want to pay it a second time.

7) Have a detailed application, and signed clause that anything left out, or not true allows for rejection and voids the lease. You can use that later if you have to.

8) Interview them for a while, and trust your judge of character.

9) Remember that you can't attach the retirement check of a senior citizen if they skip out on the lease.

10) Try to buy rugged, low maintenance properties. When you do repairs or renovations, dont worry about being fancy... use heavy duty parts. I installed industrial grade floor tile that was given to me by a friend in one of my kitchens. Not beautiful, but long lasting.

11) No pets!!

12) Maintain a nice respectable property, keep it safe, and keep the price high. If you don't have high standards, dont expect your tenants to.

13) Stay involved with your tenants. Stop by to see if they need anything, and take in sights, sounds, and smells while you're there.

14) No pets...are you getting that?

15) I like fewer bedrooms ... equals less children. You can't deny children, but you can specify the max # of people.

16) Take good pictures and video of the property before they move in.

17) If you're in an area with lots of rough tenants, charge a higher deposit.

I don't usually give my lease out, but if you want to drop me a PM, I could possibly fax you a copy.... I don't have a scanner.

Josh P

Only person I know that is still into rental property, only buy's quality property, rents for very appropriate (high) rent, and screens for quality renters. He treats them well, and his turnover is very little. I thought about buying rental property one time, but after I talked to a couple friends that had some, I changed my mind. I put my excess money into stocks and did pretty well, without all the hassles. Good luck.

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H Richard
SWCA1967 SWHF244

Back in the early 60's I'd just bought a small bungalow type house when I got a new job and had to move 100+ miles away. Rented it out. One of my painful memories was the phone ringing in the middle of the night and the renter telling me that the furnace had quit. Fun to deal with under any circumstance but especially from 100 miles down the road. Shortly after the furnace was repaired I sold the house.

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... ed ...

i have the book on the way. the house is right next door to me and the person living there will be able to look right down on top of me. we have been cleaning up for the past week and trying to straighten out the mayority of the dagerous stuff. i was wondering if the rental house paid me to work on the house could i take it off my taxes. being that i am an electrician can i not take the work i do on the house off of my taxes or do i have to hire another electrian to work on it. it not going to happen but hypothetically? any other deductions that i can do myself or should i just bite the bullet hire the other handyman stuff out and go back to work on my job? Doeboy

Years ago I had renters who got behind on their rent. When I went to see a lawyer about getting them evicted he gave me this advice... "It will be easier if you just pay them to leave."

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Vote ALL incumbents out.

Yes, you can write off all expenses concerning the rental property. Keep all receipts, you will need them if you ever get audited.

You can write off the property insurance, property taxes, and pretty much anything you have a receipt for in the repair dept.
You may check with your accountant to make sure that is all deductable in your state. I also write off utility bills when I have vacant months.

You should be fine living so close. I wouldn't want a rental house 100 miles away, as mentioned above.

If you're doing major rennovations to get it ready, you may be able to claim a loss, or very little income the first year. Document everything, even labor for friends helping. Don't pay them with a case of beer, document a payment for their help in your receipt book.

Josh P

Been there, done that.
NEVER EVER I will rent out something again.
I had it all, I can't be worse, the place looked like bombed out after police opened the door. Of course tenants were long gone and there was no way to get any compensation. I sold the appartment for half the price it was worth, just to get rid of it. Repairs were out of question, it would have cost close to 70k$ just to make it halfway OK and this 70k$ was just the estimate.
So for me: no more of this

May the good lord have mercy on your soul, or what will be left of it after being a landlord. I will never rent propery to anyone, ever again. If you have to depend on the rent to pay the mortgage on the property, br prepared for some tough times. Make sure you get at least 2 months rent as a security deposit also. People will trash your property and then not pay the rent and when you go to see what's up, they are either gone or the damage is way worse than what the security deposit will pay for. Tehn you lose rent while undergoing repairs, etc. I'm just speaking from my experience renting two houses I owned. Felt like I got out of jail when I finally sold those places. People suck.
But, good luck to you and I hope things work out good for you. You may just find the right tenants that will take care of things the way you request. Be firm is my best advice. Shoo

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"Get Hammered By a Shooboy!!"

My advice to you is this: If you have rental property, bulldoze it and plant a food plot.

I will never rent, to anyone, ever, again!!!

If the OP is still reading, I have seen the good side, sorta.
I have 5 ac. in western Colorado where we spend part of the summer in our RV. There is a mobile home on it, there when purchased, that we rent. We are seldom there so a realtor/prop/mgr. does the deed.
It's been good dollar wise, when the rent is late I have a notice to cure posted, which goes in the file and would shorten eviction. The good news is they cover 90% of the mortage and we don't pay a min. on electric/water ect.
Did you see it mentioned to ALLOW NO PETS?
Take no excuses! Get the late fee! So they call you at night when the water heater is out? You call them at 6: AM when the rent is due.
Remember, you are starting a long term relationship, wait for the right one. I had a single constrution worker in there for 4 years, worked a lot, was off huntin/fishin/shootin all the time, never late on the rent + fixed the place up. Sure he was the exception, but they are out there if you take your time and wait.
good luck.
tb

Wow. A lot of responses (many negative) in just a few days. My experience has been the opposite of most- it has been a good run for me. I bought a few rentals over 20 years ago. All single family, all within a few miles of me, in the same city (no long distance, no out-of-state).

Kenwapadle and guitar1580 offer great advice, and mine is very similar. The key is tenant selection. Run the background checks, check references, etc. If you get good tenants, your risk and problems are lessened. I have a rental management company handle mine, so even though I am in the same area, I don't get the late night phone calls. It is purely an investment, not a business to me. Also, the management company only gets paid when the place is occupied and they are collecting rent, so it is to their advantage to get it right. After more than 20 years, I have only had a few months with no rent.

Some of my good experience may be attributable to the area we live in-heavily military, so we tend to get a better, more dependable class of folks. Also, I have good middle class housing, no slum properties. That is whole area that may be profitable, but not what I was interested in.

Good Luck!

Your community college will offer a course that will discuss the local laws. Pay close attention to eviction and how the tenant can avoid it. Work to minimize your risk and hope you never have to evict.

I got the same advice from the instructor at the community college course in landlord/tenant law.

"Show up at the door with $700 cash and tell them it's theirs if they leave right now."

i'm still here sweating now but still here. is there anyone who can tell me how i can take my own labor off my taxes. as far as someone tearing it up the insurance will pay for it. then the insurance company will go after the tenant. my father inlaw had a tenant that burned paper in the gas logs. the soot had to be cleaned off the walls and ceiling and the insurance paid for that. the policy we got was the best much like homeowners the broker said that they paid replacement value not prorated amounts. just the cost to replace the house is more than we paid for it. i hope we get a good one the book we got (as was suggested above) is giving a lot of good advice. keep em coming. i have always been the type to learn from watching someone else take a beating. so share with me the rest of the story. Doeboy

Every State / County has its own laws so check yours well in some places you cannot evict anyone only a Judge can do that. Make sure you take pictures of everything in that property walls floor, ceiling, windows, roof and make they sign off and initial the pictures on the condition they receive it in. If there's ever a question on condition you have proof and a signature. Hire a pest control company or person ~ever six months this gives you an excuse to inspect the place. Don't let them paint or repair anything themselves unless they are pro's or it's an emergency/temp repair people like to paint or fix thing to their liking don't let them practice in your place and don't let them hire an amateur to do the work. When it comes to landscaping if there is no H.O. association then you need a plan you can let them do it and if they don't you can charge fee, but make sure they keep it green regardless, or you can do it yourself / hire someone which is better since you get to see the place from the outside often. And very importantly make sure you get a permit to rent in your county AND get Insurance for the place. Remember this is your property and you need to be on top of you tenants, repairs, upkeep, adjust the rent as needed for your area do your homework and get a good rent contract or hire an attorney to help you with one. Make sure you get background/credit checks and verify all references.
There are several other things I do but this should be a good start unfortunately time and experience are the only proven ways you will get better at this 'as others have posted above. If you think any of this is extreme wait until a "professional" finds your place.

--JMHO