Anybody own rental property?

[Olive6001]

I need to decide whether to sell the house or turn it into a rental property. I'm doing lots of research and want to take advantage of the knowledge and honesty of the sistahs.
Please let me know if you have experience with rental properties and are willing to share it with me.

Thanks,
Nikki

[Queen]

I managed rental properties for the mental health center when I was a clinician. Some were for clients some were for lower income adults. What I took away from that is this... I wouldn't be a landlord if you gave me free property, the hassles just aren't worth it. That said, as I understand it, it completely varies based on where you live. I lived in a town where tenants has all the rights and property owners had very few.

My advice would be to know exactly what your rights and responsibilities are in your location, can you evict without going broke, can you recover damages or is there a cost ceiling, can you elect to not renew a lease or is that at the tenants discretion, what will it do to your insurance premiums and your taxes?

[avalen]

When my daughter got married and moved in with now hubby, she kept her condo for two years, let a management company handle it. The company took care of collecting rent, doing repairs etc. She did make $50 something profit each month but the day came when they decided to sell. The current tenant did in fact purchase the condo.
She was happy with letting the management company handle everything.

[havingfunnow]

One friend owns two houses out of state, and he uses a management company, which seems to work well for him. They take a percentage of the rent and handle small repairs from funds he deposited with them for that purpose. Larger repairs/improvements are referred to him. I don't know if they cover taxes/insurance or if he does that himself. They find tenants, check backgrounds, and collect the key money and the monthly rent. He figures he clears about $300 per house per month, most of which he puts away against the cost of larger repairs.

Another friend has half a dozen small houses in a vacation area. She is renting four of them (on one-year leases) while rehabbing the last two. She does most of the management herself, with local advice from her construction guy. She does get a lot of grumbling phone calls, so it's a good thing she used to be a middle-school teacher! At present, the rented houses are covering their own mortgage/insurance costs and contributing a little to the rehab fund.

If I were going to do it, I'd certainly go with the management company. I wouldn't be able to cope with the fuss.

[OregonLuvr]

I wouldnt do it for anything. IF they dont pay the rent it takes months and months to get them out and they have all the rights AND if they are in the military they can just squat forever. My friends spent thousands getting their tenants out and then had to rehab the property afterwards. They sold it shortly thereafter.

karen

[Olive6001]

Thanks for the feedback, everyone. You're confirming what I've heard or read. Even with rental properties, it's all about location. Location, neighborhood, pretty much dictates the class of renter who'll take the house. Of course there are outliers, but I think for the most part that's true. There are a lot of military in my area (I grew up in a military family, so please no PMs about me bashing the military.) Unfortunately the ones who are more likely to rent this house wouldn't be rolling in dough. My neighborhood is deteriorating quickly, most houses are sold to investors. I have a rental on one side and redneck trash on the other. Think race cars, garbage, disabled vehicles, etc. Yep, I don't think I should become a landlord. I went to the city marshall's office yesterday and talked with head honcho, also visited the police department. Now I know what I can do to change the situation with the neighbors and what I can't. How hard am I willing to fight to stay here? Am I willing to go to court if that's what it takes? How do I frame this change so that I don't feel like I'm letting the lowest form of human being run me off? Hard questions, but I'm getting closer to resolution. Thanks, again.

[JudyJB]

My parents rented their home after they moved permanently to a summer cottage. They renters trashed the place and always paid late. After I got them out after my dad died, I had to spend $20,000 having holes in walls fixed, carpeting replaced, entire place including cabinets painted and , putting in new window coverings. As I was fixing it up and had it up for sale, it was empty, so my insurance company was going to cancel the insurance.

So, I allowed some girls who were friends of friends live in it temporarily, and they proceeded to get two huge un-housebroken puppies who peed and pooped all over the new carpeting and chewed holes in stuff, in spite of my not allowing dogs.

So, I would NEVER become a landlord unless it was a horrible house in a horrible neighborhood that I did not care about and could just abandon.

If you do decide to rent it out, make sure you have rights to inspect or have someone else inspect it periodically and make sure it is insured. (Guy would show my dad insurance and then cancel it.) Some people have good experiences, but you have to plan on the worst things happening.

[gypsyrose1126]

I have a rental property, but it is a unique situation. I rent to my daughter and family. Also, I stay there in the downstairs bedroom when I am working. But she is renting her condo out and really got lucky to rent to one couple who have been there 3 years and are terrific. I bought the property for an investment, and if this had not worked out so well, I doubt I would have done it.

[WickedLady]

Been there, done that. Sell it and never look back!!!

[MandysMom]

I own my childhood home in my town where I grew up. Both sides are original neighbors and a classmate lives down the street and has called me to report! I have a very good manager and pay her 6% a month. I take in over $1000 a month and have not had huge expenses. I keep it up so well that people line up to rent from me. I had one guy who grew up 3 houses down who was my renter for 17 years. Have had three since, over about 27 years. All have been pretty good tenants, I count on having to do some rehab after several years with same people but nothing major, except when a city tree dropped a limb through the roof a couple of years ago! My manager is wife of a classmate and does a great job in getting me good renters. For past couple of years it's a nice family of 3 who love the house. I'm very lucky I realize but wanted to give my perspective. in 2008 after tenant #1 died, at age 50 of a heart attack, Mel and I did extensive update because of how LNG the guy had been there and basically to took the house as Mom left it. We did new carpet and paint and some other items. I pay my own taxes and insurance and get a discount on insurance because I have it with USAA which does our car and our home. Taxes are minimal because I inherited the house and it falls under a special provision. It's a big decision to rent but it's worked for me. There is always the possibility I could turn it into my home base if I end up alone or with just my son because it would be convenient for him not being able to drive with everything still small town in the middle of a grown city.
Velda

[Bethers]

I rented to a friend for a year. It covered my mortgage and taxes, but the damages they left upon leaving ate every bit of extra and more. I sold and never looked back.

[SoCalGalcas]

I own a condo that is rented out and managed by a company. The company is very good and find great tenants for me. The management company does everything and I sit back and deposit the check each month. I have been very lucky in this endeavor.

Nickki your situation sounds much different than mine. As mine is a condo and not a house, our homeowners keep a close watch on all the property in the development.

With your neighborhood deteriorating, that is a big red flag.
lyn

[Olive6001]

Thanks, everyone. Once again I'm so glad to have the experience of this group to turn to. It's pretty clear to me that renting is not a good idea. You're right, Lynn. I'm in a different market than you are with a different sort of renter. Most likely it'll be an investor who buys this house. Both rentals in my cul de sac are owned by investors who do only as much maintenance as they absolutely have to. The guy who owns the one next door has said he's interested in buying mine. He'll low ball me. Good thing I know how much I need to walk away whole and it's a below market number. Anything more is gravy.

I've also realized that I don't care much about getting money for my stuff. The little bit I'd make isn't worth the anxiety at this stage of my life. I'd much rather see it go to good people who need stuff. My life is full of stories about amazing generosity from all sorts of people. None of them were so called family. I've always had a generosity bucket in the budget. I think I'll throw all this house stuff in there and send it out into the world. Just have to watch out for vultures. So if you know anyone in the San Antonio area who is down on their luck, has a truck and some muscle, and needs stuff, let me know.

Hmmm...I guess my mind is made up. I'm outta here. I can do it over time, just slowly and surely. No biggie.

Whew! What a relief.

Nikki

[retiredhappy]

glad you made the decision to not rent. I had bad experiences with several different renters. Had same problem of neighborhood going downhill so the renters weren't the best. If you can, sell and put enough money aside for a down payment on something in the future. You going fulltime? In your current rig? You still need a homebase, even if its an rv park, for your medical appoinments, taxes, etc. I think you'll love not being tied down by house or stuff.

[Colliemom]

I think it would be good to just sell and get outta there as you say especially if neighborhood is deteriorating. It sounds scary I know, but once you are on the road, you wil be busy seeing new places and people and might even fall in love with someplace and put roots down again. This is now my plan, should some last minute thing cancel out my offer on the house I want to buy. I will get a different rig and go. I've heard too many horror stories about rentals from friends too.