Going To Rent My House

[redlevel]

I have referenced the fact that we have homes both in the "city" and the country. We built our house in the subdivision nearly 30 years ago. About 8 years ago, we did a major renovation on my wife's farmhouse that has been in her family 100-plus years. Actually, technically, the country house belongs to our unmarried daughter. She has taught in a two-year college about 70 miles away for more than a year now, and is renting a house there. We (my wife and I) have lived almost exclusively in the country house since that time. Our house in the subdivision is nice, but it is reaching the age where it needs some maintenance. We just finished putting a metal roof on it today. Hopefully, that is the biggest dollar expense that will be involved.

Once we get the work finished, we have decided to rent the house out to try to turn around the cash flow situation with the house. Heating, cooling, electric, cable, phone, etc., is nickel and dime-ing us to death. It is a pretty nice place, about 1800 heated sq ft with a couple of large screened porches. Very rustic, on about 1.5 acre lot. Well insulated. Lots of heart pine floors, walls, etc. Stove, refrig, dishwasher, washer/dryer. Two bedroom one bath upstairs, one bedroom one bath down. Heating/cooling units for each level.

I plan to set the rent high enough to keep riffraff out. I probably will put it up for sale, but again, I will set the price high enough that I won't mind if someone takes me up. I don't really want to sell.

Questions for the group: what are the major pitfalls of renting? I have heard horror stories, and I also know some folks who have had renters for many years, with mutual satisfaction. What about insurance? Is there a standard rental contract? What rights do I have as a landlord? How much deposit should I ask for? One month in advance, with rent due the first of each month? I figure if someone can't pay a month's rent in advance, they probably can't afford to rent the house. I figure to ask $650 per month to start.

My daughter just read this over my shoulder. She comes home to visit one or two weekends per month. She wanted to know why I referred to her as "our unmarried daughter." She wanted me to point out that she isn't an old-maid spinster English Teacher, but that she is just really picky.

I only have one current photo, but it gives some indication of what the house and lot looks like. It is really a very pleasant area.

 

[Gunslinger808]

You WILL regret it.
Sell it, or save it.
I have stories, everyone on the interweb that's rented has stories.
You have been warned.

 

[Texas40]

My wife and I manage 4 rentals for her dad and it is a PIA. Trust me sell it or live in it being a landlord is not worth the hassles. It sounds like a great idea but usually the results are anything but. We have had to tear out flea infested carpet fix holes punched in Sheetrock by evicted renters catch several cats left in the house by evicted renters and many other undesirable things. Have fun.

 

[teesur]

Once we get the work finished, we have decided to rent the house out [URL="http://i129.photobucket.com/albums/p208/redlevel42/IMG_1881_zps3e9225b6.jpg"][/URL]

Do yourself a huge favor - - - DON'T!

teesur.

 

[Onomea]

I own two houses in Hawaii and have rented both out for a number of years. (Am selling one at this point.) For me, hardest part has been being an absentee landlord (as I spend most of my time in Japan).

My first property manager ripped me off -- would do stuff like charge me for a lawn service that wasn't cutting the grass -- and I think various contractors took advantage of my not being around to overcharge on maintenance projects.. You don't say how far away the farm is from the subdivision house, but if close enough that you can manage the place yourself, keep an eye on it, I should think that would make a difference.

Also $650 a month sounds awfully low to me but I have no idea what rent is locally for you. Be sure to check that out. Your place sounds very nice and if you can find some nice folks to move in I think you will do okay. I would try to find a married couple, perhaps a family, because overall they are more stable than singles. A couple of young guys with pals who love to party.... Well, you get the idea.

My worst experience was a guy who took off owing me three months rent. Never have recovered it. He was a charmer and talked me out of insisting on a month's security deposit. Get the security deposit, and require the rent on time. Take pictures of the house before you rent it out in case there are disagreements over damage.

If you are too far away to manage the property yourself, or don't want the hassle, and have someone you can trust -- I wound up using a family friend -- it can be even less of a hassle. I pay 16% of first month's rent, as it includes prep efforts, advertising, and showing the place, and 8% thereafter to my property manager. Maybe you have a neighbor there you like who could do with some extra bucks...

Require references for rental candidates, and check out the references. You definitely want a formal contract. There are probably samples on the internet. Think I saw a book once on how to be a landlord. One of those "For Dummies" books.

Re insurance, I have 1) fire/homeowner's, 2) hurricane, and 3) liability insurance.

Good luck!

 

[LVSteve]

My daughter just read this over my shoulder. She comes home to visit one or two weekends per month. She wanted to know why I referred to her as "our unmarried daughter." She wanted me to point out that she isn't an old-maid spinster English Teacher, but that she is just really picky.

I only have one current photo, but it gives some indication of what the house and lot looks like. It is really a very pleasant area.
http://s129.photobucket.com/user/redlevel42/media/IMG_1881_zps3e9225b6.jpg.html

I'm only seeing pictures of the house. Where are the single daughter shots?

Seriously, I don't know how the rental market is in GA, but here in Las Vegas $650/month MIGHT get you a fair 2-bed apartment in a half decent area. Single-family homes start at $900-1000 to live in the equivalent of lower Beirut.

I rent the house I live in for a bunch of strange reasons that are way off topic. However, as I have been here with the two owners for 12 years I must be a fairly good tenant. In Vegas I am definitely an anomaly, though.

 

[LoboGunLeather]

If you decide that you must rent the house I suggest that you consciously decide that you will never, ever live there again. The emotional bonds must be severed completely, otherwise there will be disappointment and heartbreak somewhere in the future.

A home is a home. An investment property is an investment property. Big difference!

 

[Trotter]

IF you have to rent it look into renting through the State Dept. I rent one through them and have had no problems for 8 Years so far.

 

[trashy]

I agree with others that $650 for a 3 bed, 2 bath house is low. There are average 1 and 2 bed apartments locally (central MS) renting for $550 - $750. Also, you stated you wanted to "keep the riff-raff out", charge more or don't rent, may not be worth the hassle.

 

[joeintexas]

I would recommend either using an agency that handles rentals or someone you trust to handle the transactions each month and keep an eye on the place, including periodic inspections. We pay a lady that does that sort of business with several companies 10% of the rental fee and she collects the rent then sends us the check, we send her the 10%. Insure heavily and by all means collect a cleaning/damage deposit and first and last months rent and have a rental agreement signed. Cover yourself as much as you can. Buy lots of aspirin. Good luck.

 

[BillK01]

I have a rental above my insurance agency that's been mostly trouble free for 17 years.

Have your insurance agent write you a good Rental dwelling policy on it, REQUIRE your tenants buy renters insurance with you being named as an "additional insured" and get a copy every year when it renews. I joined Landlord Protection Agency - Free Rental Forms - Tenant Credit Reports for lease and general landlord info. They have great leases that you can customize to your need.

I've actually used craigslist for my last 3 tenants and it has been ok. I do have a local real estate guy I know run their credit and review each application (weed through the dreggs of society) and he gives me his thoughts before I make my decision.

 

[jaykellogg]

Your rent sounds low considering the square footage. I rent an 1100 square foot 3Br, 2BA for $1140 and a 1280 square foot 3 BR, 2½ BA with a 2 car garage for $1260. My standard deposit is 1 month. Some landlords ask for the first and last month's rent. There is a lot of protection if you can do that, but I find many tenants cannot come up with 3 month's rent. I charge a $300-350 non refundable fee for a pet. Both of my tenants have pets.

Mostly the lease gives rights to the tenant. My rent is due on the 1st and the grace period is the 4th. If I don't get the rent by then a 5% late fee applies and believe me, I collect it! Make sure the lease states who is allowed to live in the house. This is actually a poor time to rent. June July are the best in my experience. I have two very good tenants right now and I am rehabbing a cabin for a possible third rental. There are tax advantages to being a landlord, I write off every dime I spend in a hardware or home supply store. If you're going to refinance do it before you rent, they charge higher interest for rentals. Make sure the house is pretty and attractive. I have a neighbor who rents in the $650-700 range and he sometimes has trouble collecting his rent. I urge you to seek a higher rent even if you have to put money into the house to justify it.

 

[DeadAye]

We had some good luck renting and some bad - VERY BAD.
The last *tenant* moved in and NEVER paid rent - It took ONE YEAR to get them out of the house. We won a judgment in court for the entire rent and damages (painted bed rooms black - painted the hardwood floors - stuff like that) but never collected a dime.
While the house was empty someone removed ALL of the copper from the house - including the plumbing!

NEVER AGAIN!!!!!!!!!!

On edit:
PS - Without wires or pipes a house doesn't sell for much.

 

[bricker]

I don't know if it is legal, but a credit check is a good idea as well as references from previous landlords. The ones who have the utilities turned on in their children's names usually are the ones who are not good tenants. These are some of the life lessons I've learned.

 

[doublesharp]

I've been around rental property all my life and it is a pain. It's a good way for a poor boy to grow wealth but some renters will trash a property regardless. A credit check is absolutely legal in Indiana and I would recommend it.

Don't furnish appliances, especially the refrigerator. If the tenant doesn't have a stove/frig, they will probably take you. Get first, last and a months security deposit and don't call the deposit a damage deposit. $1950 to move in on a $650 per month property. If they can't pay that, you don't want them.

I'd think long and hard before I rented out anything that meant anything to me but, if you're going to do it, just assume all renters are going to screw you and manage accordingly.

 

[Mule Packer]

We rented our home out for two years while we went out-of-state for graduate school. What a nightmare!!!

The first family seemed very nice, but trust me...looks are often deceiving. They trashed the place, were always late on their rent when they paid at all. We finally got them out of there. The next family was known to us. A nice family...but they also trashed the place. Never kept the yard up. The front lawn looked like a hay field. The carpet was rotted out where they had let water run all over it. They broke out the glass in the storm door, etc.

We finally sold the place. Hindsight being 20/20, I should've sold the place before we went to graduate school.

 

[G-Mac]

I'm a landlord. I suggest trying to get first month's rent, last month's rent, and a security deposit (equal to one month's rent), before letting somebody move in.

Why? Because when they decide to move out (with no notice), they won't be paying you the last month's rent (if not more). They will tell you to use the security deposit as the last month's rent. They will then trash the place, leaving you to clean up the mess. You will have no security deposit and little recourse. Sure, you can take them to court and get a judgement....but get in line behind the other ten landlords that already have judgements against them. Ask me how I know this.

Screen them well. Do background checks. If possible, find a nice working couple where the husband is handy....they won't be calling you every time a screw needs tightened on a hand rail, etc.

Have a signed lease, and include a late fee if rent is not paid on time. A five day grace period is fair, in my mind.

Sorry for possibly repeating what may have already been said....but you need to know these things, my friend.

Good luck.

 

[Andy Griffith]

That is a very nice house.

Please READ up on what Clark Howard and Dave Ramsey have to say on renting...

I've had indirect experience on the subject through acquantences that have done it.

Georgia laws, it seems on face value, do favor the renter instead of the landlord. They can be hard to throw out if need be. I have heard of some landlords having them sign an agreement that they can be evicted in only one week- don't know if it's legal to do or not.

A friend of mine has nine rental "homes" and makes a good living on it. He only rents to "section 8" people though, which is guaranteed rent no matter what (from what I'm told).

If you can find people that are relocating, and need "temporary" housing while looking for a home, that would be your ideal renters.

Location may be going against you.

Maybe you can find some yankess that want to get out of the snow for a while- that would be ideal too!

 

[ColbyBruce]

I have a acquaintance who rented his deceased parents home in Decatur, GA (near Emory University) to a real estate attorney and her professor significant other. Nearly a year later, all he has gotten out of them is the first months rent and deposit. Booting them out is a difficult process. I suppose this is how the couple can afford to drive a M-B and a Maserati.

On the other hand, my son and his wife rented out their first home and so far have had no problems.

 

[Pete99004]

I have only rented out one home I owned and it was not a good experience - we lost about $12K before it was over. I would suggest that if you live next door, or across the street, or on the same block, go for it. Keep the rent high - demand 1rst and last month rental in advance with a healthy deposit. Or use a "trustworthy" management company. By all means contact a "good" real estate attorney to help you identify the pitfalls and write the rental contract/agreement. If anyone wishing to rent it even looks like "Meth Heads" run away from them. They are very hard to identify! Just keep in mind that if your renter does something illegal and the police trash the house trying to arrest them, or during a search, you get to pay for the repairs out of your pocket and then try to collect from the other parties involved - after the fact.

I wish you good luck if you do it, but I don't recommend it unless you are there close by to keep a close watch.


Pete