Anyone with rental property?

[gb387]

Just that anyone own any rental property?

I am seriously thinking of renting my townhouse, at the end of the summer my g/f and I plan on moving in to her house. Now I am not totally sure I want to sell my townhouse (for many reasons). I am very interested in using it as a rental, now I don't intend on making 'loads of cash', I understand my mortgage an all that junk that goes with it but rather make a little money, keeping it in its own account or use on the property for what ever reason, I am mostly interested in paying down my loan and the benefit to me down the road I am very patient.

now, any thoughts, suggestions or just plain don't do its!?

[Superior Shine]

Re: Anyone with rental property?

Be prepared for the rental to be trashed. Get into the mind state now so you don't lose your mind later. Fix it up and rent it again.

I use a property management company to manage it. They charge me 10% of the monthly rental price.

[gb387]

Re: Anyone with rental property?

Be prepared for the rental to be trashed. Get into the mind state now so you don't lose your mind later. Fix it up and rent it again.

I use a property management company to manage it. They charge me 10% of the monthly rental price.

I have recently read about the property management companies... That is my biggest worry is the 'getting trashed', I am very handy and do all the work I can on my own but at the same time I don't want my already hard work to get destroyed. I just don't get it, I rented many years prior to purchasing and never damage anything, I did my best to keep it up and looking good in an effort to get my deposit back. just boggles my mind!?!?

[Superior Shine]

Re: Anyone with rental property?

Just make sure you screen the potential tenants real good. Get credit scores, referrals etc..

[ITAKEYOURRIDE]

Re: Anyone with rental property?

Make sure you have a good lease to cover yourself. Also want to make sure you get good references from your potential renters. Animals is a thing that you need to really careful of, especially cats. They can really make a mess and people sneek those things in left and right. Only way to tell if a cat is there is to use a black light and and there urine will glow in the black light. (Trick I learned from doing rentals)

Also READ THIS!!! http://www.dca.ca.gov/publications/l...ok/index.shtml
You also want to know YOUR rights as well as your TENANTS rights! I have 2 rental unit and I lucked out. I had one bad apple that did alot of damage, I sued in small claims, got the judgement for $3700 and he filed bankruptcy and Im out the $3700. Becareful and talk to a real estate attorney for further help and read the link I posted. should help you out some

[ITAKEYOURRIDE]

Re: Anyone with rental property?

Also INSURANCE. Make sure your insurance covers a rental, of course the tenants should have renters insurance, but you need the coverage for the structure itself.

[southpactire]

Re: Anyone with rental property?

Both my husband and I have been landlords for over 10 years. It is extremely important to factor in the maintenance costs of regular wear and tear, along with a fund for "bad tenants" and a vacancy factor (the time you don't get a rent check while you're re-renting or - worse case - rehabbing and re-renting) A good rule of thumb is 25% of the gross rent needs to fund your rental emergency fund. If your property cash flows after the 25% then you have a pretty good situation. Sometimes you make the decision to "feed" the property financially, but that needs to be taken pretty seriously. Keeping a separate account and good records will make the IRS happy, but it also allows to you look at the property and see if it really makes financial sense or is it an emotional decision. Having a house that you own that you could move into if the new living arrangement doesn't work out is great peace of mind, and you may feel that it is important enough that it doesn't have to make a profit.

I have always been my own property manager, because the margin on my property has been too slim to pay a property manager, while my husband pays a property manager to handle his rental house. I manage a bank and have a credit underwriting background, so tenant screening is pretty easy for me. Joe is right that this is a critical stage in making/breaking the landlord/tenant relationship. Being well informed on the landlord tenant law in your state is also required.

We do some of the maintenance ourselves between tenants, but hire out some of it. Having a network of subcontractors to handle plumbing repairs, HVAC or electrical issues is a great idea. Escpecially if the tenant calls while you are on vacation, or it's two in the morning and you don't want to fuss with unclogging a toilet!

[ColonelCash]

Re: Anyone with rental property?

Agreed with the previous post, except I don't unclog toilets or sinks. In my lease, that is part of the tenets responsibility. If they stop it up, they call the plumber and pay the bill. I'm 26 with 4 houses, so here is what I've learned in a very short time (2 years).

Despite all the screening you can do, "bad apples" can still get in. I have 2 tenets right now that are giving me grief. They had decent background checks, although they do work for a lawyer, so they throw around their lawyer weight. Also, I have an "application fee" of $30 for anyone who wants to rent the place. That $30 is transferred to a credentials verification service who does the background checks, follows up on work history, runs criminal / eviction checks, etc. It's a great idea and will save you LOTS of heartburn. Plus, if anything comes up down the road, its a good idea to have the verification service to support you. They do this daily and will have more say-so than someone who does it once a year.

If you plan on renting out multiple houses, get yourself a good real estate lawyer. If you can find one that spits fire and makes old ladies cry by walking into a room, you are in good shape. Don't assume that a "big law firm" will have any better lawyers than a small one. They all use the same law and it can't be changed according to who is presenting it.

Most states are pro-tenet, so landlords can have a tough time evicting them. For my leases, I use a month-to-month rolling lease. 95% of the time, people stay for longer than the normal 12-month lease period. Also, since the lease auto-renews, I can make edits after every 30 days incase extra clauses are needed (no parking on the grass, no trash outside a trash can, etc).

Go to your library and find a book called "Every Landlord's Legal Guide" and take a read. It's a good intro to being a landlord. I have the 8th edition (has a yellow lab on the cover). This is not a State Specific book, but has some high level information for landlords.

On the upside, you have someone paying your mortgage. I like the idea that I will have 4 paid for houses before I'm 40 (plus what other houses I buy between now and then). Also, I'm an IT engineer at work, so working in a house fixing real stuff is rather fun. I don't do it all myself, but I have a list of great contractors for the routine fixes (plumbing, electrical, A/C, painting, etc.)

Hope that helps.

[TXShine]

Re: Anyone with rental property?

You’ve gotten some solid advise here and the only thing I can add is this... and Joe touched on it.... be prepared for how people could treat your property. It sounds like you have a real emotional attachment to your place and that’s not a bad thing... but for a landlord.... not so good.

[gb387]

Re: Anyone with rental property?

Thanks for the tips and post, lots to think about! Thanks Again, anyone want to add anything else?

[Deaner5]

Re: Anyone with rental property?

Not a rental property expert, but at the accounting firm at work at we audit a lot of apartment projects. An item to remember is that when you have to turnover a unit it might take some time and expenses to get it into rentable shape again.

Also, from doing individual taxes for people with a Schedule E (the form for rental property) try to keep good records. While this will make you tax preparer, or yourself happier, it will also be easier to track the status of how you are doing.

Another note, an investments teacher of mine in college spent a day lecturing about how real estate doesn't always cash flow in the beginning, but once it's up and running (and hopefully maintenance free for a whlie) it should cash flow a little better. Remember that's just the accountant in me talking, not a property manager.

[Superior Shine]

Re: Anyone with rental property?

Thanks for your input.

I have had my place since October and it has been a money pit from the beginning. Eviction, repair, property management, etc.... I haven't made one cent from it yet -live and learn.

[jayharold]

Re: Anyone with rental property?

I do maint. work for a company that has about 150 apts. You have to screen the new tenats very good and then you will still not know if you are getting people that will take care of the place. One thing I have found out is do not let them have pets. A lot of people try to sneak cats in and if they piss alot on the floors it is almost impossible to get the smell out. You usally have to replace everything they went on including the sub floor.

[rebelde33]

Re: Anyone with rental property?

My parents were thinking about renting the townhouse they used to own but the "trashing" factor was too much and they decided to just sell it and get a new house. They did get about $80,000 from having owned it for 7 years so you might want to think about what you will be getting as opposed to leasing it.

[cafemoc]

Re: Anyone with rental property?

Thanks for your input.

I have had my place since October and it has been a money pit from the beginning. Eviction, repair, property management, etc.... I haven't made one cent from it yet -live and learn.

I have 6 houses, all of them are rented out, however am not making any money at all.

All of mine are out of states property, so eviction is much easier than Cali, but cost of repair cost me a lot People just don't care for rental property at all..