Going To Rent My House

[feralmerril]

We own a rental. At times I hate it but when things go good we like and need the income. Before I go farther, GET A PROPERTY MANAGER! They charge 10 % of the income. They advertise the house and find the renter, collect the rent and keep the bookwork straight for taxes etc. Even with a good honest manager things can be a headache at times. The biggest reason I use a manager is I am soft. In the past I have given in to pity story's etc. I don't even know what the renters look like. You wont get calls in the middle of the night the heater broke down or whatever. The manager takes care of things like that and has people to send over etc. Now other people that are handy and can do things themselves etc will save if they handle the rental and work themselves, but NOT me!
Personally I couldn't afford to live if I had a house sitting empty very long. I need the income and it has to be a stupid business decision to have a investment like that drain you and not be making you some money.
Our rental is almost twice the size and money of the house we live in! It sits on a half acre. We CANT live in it and rent the one we live in. That is because I bought it on a 1031 exchange tax dodge deal. I had owned 10 acres of mountain land in California hoping to build on it when I retired but we decided to sell it instead. I sold it for a huge capitol gain and was looking at about paying about 40 K taxes! The new buyer informed me per rules he was doing a 1031. I had never heard of it and boned up and decided to do the same. We rolled it over on the rental. Its been a lifesaver for us. Also it killed us in between good renters. It go`s without saying everyone's situation is different so try to look at all the angles. I am owed about $4,000s from the last renter before our new one!

 

[Doug M.]

There is a reason (or there are many, take your pick) why the majority tell you not to rent it out. A few tell you to get a property manager if you are determined, and make other suggestions. Notice a trend?

Do yourself a favor. Free up the capitol and sell the place, avoid the party size pain the backside of dealing with a tenant, and make peace with it. If you want a big pain in the butt, pay me the money you would otherwise lose, and I'll come kick you in the backside for a few hours, then sell the house anyway.

 

[jaykellogg]

I don't put much stock in the most recent landlord. They may give a good recommendation just to get rid of the deadbeats. BTW, I have a judgement of $2200 I'll never collect. The deadbeats get a legal aid lawyer and go to court and plead they need a place to live. I had to pay over $100 in fees to evict someone from a house that was 5 months from new. Then It took two weeks to make it (sorta) look new again. I had them out in two months though.

NC law gives 4 days grace period. Don't be surprised if they take it all. Then the law allows you to assess a 5% penalty. If the rent is due on the 1st and is not paid on the 5th, Issue a demand letter. 10 days later you are at the courthouse swearing out papers for eviction. Any delay is just free rent for deadbeats.

 

[PatAz]

Get copies of the landlord tenant laws and do a background screening of any potential renters.

 

[Practical]

You don't are NOT in the right mindset.

You view this place a home.

A landlord views it as a financial investment. HE does not live there, he does not plan on living there and he expects damage and expects to be in court on 1/4 of his leases over failure to pay.

My brother owns 30 rental units. He said owning the first 4 were the hardest.

Renters destroyed property, skipped out on paying, intentionally destroyed property and then reported him for zoning violations they caused.

You don't sound like you have the right mindset. You are a homeowner, you don't have a clue.

Wait till you are pulling hidden items out of airducts like money or drugs hidden by former tenants from other tenants or you are pulling burned carpet our OR you are using a plumbing snake to get broken video tapes out of a sewer line because someone flush home porn and diapers down the toilet. Or had every wall he ever did dry wall repair broken.

OR you are loading 3 pickup loads of trash to take to the curb or had a tenant disappear and never return -- leaving you with a household of items to deliver to his mom which is family friend.

Yes, you don't understand renting.

10% of his tenants skip out without paying. Every year.

 

[Kanewpadle]

Renting out a house is a PITA. But it can be fruitful. My observations over the years as a renter, owner, and locksmith.

Not all property management companies are equal. Many are lazy and only want your money. Before considering one see what they have for rentals. Drive by and look at one. See what the condition is. Check their references on line.

Credit checks don't do any good. Especially these days when folks are struggling and live payday to payday. Instead get rentals references from your prospective renters and check them thoroughly.

Do require first, last, and deposit. If pets are allowed get a pet deposit too. Anyone serious about renting your place will be able to come up with that kind of money.

Check your states landlord/tenant laws. You would be surprised at what you can and cannot due legally. Here, if a renter defaults you cannot simply enter and take control even if it is your property. If personal property is still present you must contact the sheriffs office and arrange for a deputy to escort you which also means a court order. The only way out of this is IF the house looks like it's been abandoned. But you are still required to store the tenants property even if it looks like trash and make reasonable attempts to contact the tenant to pick those items up. There are others things that you will be required to do as a landlord according to the law.

As a locksmith I've been in hundreds of rentals. I've done work for property management companies both big and small as well as private owners. I could tell you horrors stories. I've seen both good and bad. And I've accompanied owners and deputies during evictions. So many that I'm on a first name basis with two deputies. I've seen drugs, a meth lab, animals left behind, dirty diapers, used condoms, you name it.

One thing I would do is replace the door knobs with non locking knobs IF you have deadbolts. This requires the tenant to lock the deadbolt only and eliminates the possibility of locking themselves out. I've seen tenants kick in a door when they were locked out. And add to your rental contract that the locks are not to be changed without your consent. Some renters will do a "midnight move" after they have changed the locks and now you can't get it. Add to the contract that they will be charged for this too.

Also specify exactly who or how many people can occupy the home. Some renters will move in others after the contract is signed and your back is turned.

And when you rent the place out make sure to change the locks each and every time. In some states you could be liable if a prior tenant came back and did something bad. It's happened before.

Good landlords are picky. They can't discriminate legally, but they do. A smart landlord will.

 

[redlevel]

Thanks for all the good advice so far. A few points:

1. I am retired, and can "eyeball" the property once a day if necessary, and surely a couple times a week.
2. My brother lives next door and can help watch it.
3. My accountant tells me I can deduct the cost of the repairs I'm doing if it is a rental property.
4. I knew there would be comments on the rent being low, but this is South Georgia. There is a lot of demand for $400-$500 per month rentals, but when it goes above $500, I think the curve starts getting pretty steep toward lowered demand.
5. I am hoping, ideally, to rent to a teacher and his/her family. The location of the house makes it very viable to teach in my county, or any of the adjacent counties without a long commute. Of course, there are other possibilities for tenants, preferably retired or professional people.

I like the idea someone suggested of renting to snowbirds. I might even be amenable to renting from October through March or April, for the right price and to the right people.

Still a lot of thinking to do. I have a good friend in the real estate/appraisal business. I imagine he can help me with the legalities, contracts, etc.

Keep the suggestions coming. Good and bad experiences. I have even heard of renters leaving in the middle of the night and stealing the lightbulbs out of the fixtures.

 

[ColbyBruce]

The house next door was a foreclosure when I moved here in 1995. It is a split level home with the garage under the kitchen. The guy that lost the home used a chainsaw to cut a 8'x8' hole in the kitchen floor and dropped all of his belongings through the hole into the bed of his truck when he finally moved out. It is a shame he didn't hit the 220 line going to his stove with that chainsaw.

 

[bricker]

I have had them take the blinds from the windows AND all of the switchplates and receptacle covers as well as the light bulbs.

 

[amazingflapjack]

A Good real estate attorney that is knowledgeable about your area is essential to gaining insight to the pluses and minuses of renting, as well as drawing up the right contract for your situation. An hour of his time + or - might make the difference ion your decision or the contract you need. The fact that you are in close proximity to the property is a large plus. Screening is critical. If you can avoid "advertising" it as a rental, and use referrals as a means of getting the right renter, it would be much better, in my view. Churches, and other entity's that you are well familiar with are a good start. I would make it clear that you plan to oversee the property to protect your investment: some have taken on the job of "pest control person" just to monitor how the house is being used. A good renter should not be opposed to free monthly bug spray with a preset day for this service. The wording of the rental contract is key, and references can be helpful. Some provisions/limitations that I would include would be; number of occupants, smokers? pets? etc etc. In Ga., word of mouth is king. If your home is desirable, it will find a renter. I would offer a reduced rent to someone who typified my dream renter.

 

[R. G. Amos]

I worked abroad years ago and leased my house when out of the country. You can do all the background/credit checks you want, but you can never be sure. In my experience wealthy renters were generally the worst - I have no idea why. You can try to charge a very high security deposit in hopes of covering your losses because you are unlikely to recover costs in excess of those covered by the deposit. Also, check your homeowners policy because the terms for a rented house probably differ from those for a house occupied by the owner.

I was reasonably fortunate in that I never sustained excessive damage. but I had one renter who would not vacate the house upon the end of the lease period. It took me almost six months to get him out of the house. He paid the rent in full and on time, just would not leave, and it is very difficult to evict a renter.

 

[handejector]

Questions for the group: what are the major pitfalls of renting?

Elementary, my dear Watson- the people who rent from you!

 

[Onomea]

Redleve, I like the teacher idea. Maybe visit some of your local schools and let them know you have a rental available.

That is great about your brother right next door.

Probably a good idea to let your other neighbors know your plans, too. (I have found that in general well informed neighbors tend to be happier neighbors. Same for me, too.)

I think your situation sounds ideal for a landlord.

 

[moosedog]

When I rented out my home I used to have the potental renters fill out a application with past history, work history etc.
It worked well for me and I never heard any flak from anyone.
Caused a few low lifes to change their minds.
Remember, dopers can have huge volumes of cash on hand, so you can't always judge by the income of the potential renters.

 

[zzzippper]

I am a renter (Denver) and a rentee (St. Louis). For the house I own I hired a management company. There are different levels of management but since I was going to be in Korea I opted for full management. They vet the applicants, collect the rent, and handle repairs for 10% of the rent. To me it was, and still is, a good deal. But there are repairs that I ask explanations for.

Here in Denver and I am a renter. The landlord is a complete dumbass and tries to do everything on the cheap. We pay $1700 a month and I can't wait to get out of here.