Any Advice/Words of Wisdom for Renting Out a House?

captouch

captouch

Addicted Member
It's very likely we'll be renting out our house.

Full service management companies seem to charge 8-10%, our realtor will charge 6% for a subset of these services (advertising and qualifying tenants, lease paperwork, maintenance needs, but doesn't include collecting rent, issuing financial statements, etc).

We were pinged by one of my daughter's classmate's parents about renting our place, so it may be that we don't have to run a search, advertise, etc. So there's also the option to try and DIY, but I'd need to figure out how to do all the preliminary checks (credit, rental, background if needed) myself.

We'll be about 15mi away, so it wouldn't be a problem to check on the place now and then or take a look at a tenant complaint about something broken and assess whether we needed to call someone or could take care if it ourselves.

Any words of wisdom? Such as DIY-ing is very doable and here's what you need to do. . .or it's a PITA and definitely get a management company even though they take 8-10%, etc.

Thanks!
 
If you are going to be that close by, you can manage this yourself. It will be much less expensive for sure. However, you MUST make sure you document everything on paper. Download an example lease agreement and modify it to your liking. I would also research any local laws having to do with rental property management including what to do in case you need to evict (the legal procedures). I don't care how much you think you trust someone or how much you think you know them, always spell out all of your expectations in the contract. It will be a mistake to take anyone's word in place of a legally-enforceable agreement. (ask me how I know)

I don't care how petty you may think it is, but if you don't want a bunch of non-paying guests, run down vehicles, oil splotched driveways, heavy tobacco odors, pet odors, and hoarding, you would do well to spell it out. Give yourself every opportunity to remove a bad renter legally. I would put an inspection clause in the contract so that you are already scheduled to enter the home at certain times periodically (once a month maybe) to evaluate the condition of the property to keep ahead of maintenance. It will surprise you how some people live and what they are willing to do in someone else's home that they would never do in a home they actually own.

There are good renters out there, but you want to be able to quickly remove a problem before it gets out of control and ruins your property.

Good luck
 
We do the rental thing. Here's what we've learned:

1. Everyone living there has to sign the lease and be equally responsible for the entire amount of the lease.

2. Everyone living there has to be on Renter's Insurance.

3. Home Warranties are fantastic! In Phoenix about $600 per year covers repair or replace of water heaters, furnaces, plumbing, electrical, kitchen appliances, etc.

4. Make it clear in the lease that it's their responsibility to deposit rent directly to your bank account by (x) day of each month. Eliminates post dated checks, wrong amounts, mailing on the day it's due, etc.

5. Do it under an LLC. Tax benefits, repair and investment write-offs, lower income tax. In Phoenix, anyway.

6. Don't provide a washer & dryer. Seems like most people haul their own around. Which is good. You don't want to invest in new appliances and putting $100 Craig's list machines in there are just doomed to fail.

7. Be diligent about upkeep & repair and security around the place (outside motion lights, etc).

8. Provide the landscaping service. The renters will never keep it how you want it.

9. No cats.

10. Make sure all utilities are in their name before moving in.
 
Decibel_116 said:
I would put an inspection clause in the contract so that you are already scheduled to enter the home at certain times periodically (once a month maybe) to evaluate the condition of the property to keep ahead of maintenance.
Click to expand...

That isn't legal. That's equivalent to you granting the police access to your home monthly, unannounced and without a warrant, to search your premises to make sure you're not breaking any laws.
 
My advice would be don't rent to anyone like me and my friends back in the day :beerchug: :rflmao: :rockon:
the good old days with $100-$150 rent split 2 or 3 ways
 
ETLS said:
That isn't legal. That's equivalent to you granting the police access to your home monthly, unannounced and without a warrant, to search your premises to make sure you're not breaking any laws.
Click to expand...

Incorrect. As long as you give 24 hour notice before entering, it is perfectly legal. And no, it is not just like granting access to the Police without a warrant . Rediculous.
 
Decibel_116 said:
Incorrect. As long as you give 24 hour notice before entering, it is perfectly legal. And no, it is not just like granting access to the Police without a warrant . Rediculous.
Click to expand...




One, Two, or Three Times a Year is Normal
Some landlords don’t do inspections at all. This is a bad idea. Maybe your landlord is uncomfortable telling you they want to do an inspection. Or maybe your landlord doesn’t realize the importance of conducting routine inspections. Whatever the case, you can’t count on your landlord never inspecting the rental property.

Some landlords are just the opposite, wrongly believing they can enter the property anytime they like to check out their place. Note to tenants: they can’t! You have what’s known in the law as “the right to quiet enjoyment.” That means your landlord can come over only for specific reasons and can’t come over excessively.

Read your lease to see whether an inspection is specified in the lease. Landlords often inspect once a year, but some inspect a rental property twice a year or quarterly. Whatever the case, you are entitled to get notice, usually 24 or 48 hours in advance, before your landlord comes by to do the inspection.

https://www.landlordology.com/how-often-can-a-landlord-inspect-a-rental-property/


Again, I call bullshit on monthly inspections. There are laws against having a landlord going full blown Gladys Kravitz on a Tenant's ass.
 
ETLS said:
One, Two, or Three Times a Year is Normal
Some landlords don’t do inspections at all. This is a bad idea. Maybe your landlord is uncomfortable telling you they want to do an inspection. Or maybe your landlord doesn’t realize the importance of conducting routine inspections. Whatever the case, you can’t count on your landlord never inspecting the rental property.

Some landlords are just the opposite, wrongly believing they can enter the property anytime they like to check out their place. Note to tenants: they can’t! You have what’s known in the law as “the right to quiet enjoyment.” That means your landlord can come over only for specific reasons and can’t come over excessively.

Read your lease to see whether an inspection is specified in the lease. Landlords often inspect once a year, but some inspect a rental property twice a year or quarterly. Whatever the case, you are entitled to get notice, usually 24 or 48 hours in advance, before your landlord comes by to do the inspection.

https://www.landlordology.com/how-often-can-a-landlord-inspect-a-rental-property/


Again, I call bullshit on monthly inspections. There are laws against having a landlord going full blown Gladys Kravitz on a Tenant's ass.
Click to expand...

You can call whatever you want on it. My tenants have NEVER taken issue with my monthly inspections. If they did, they would not be renting from me. It's in the contract they signed. To each their own though. It saved me a couple of times.
 
Pay the 6%,
Do it through the legal channels,
It will save you lots of grief.

Years ago we rented out our house,
and weren't close enough to do any maintenance / inspection ourselves.

One 'funny' thing that happened 3 weeks in a row,
first time I laughed,
second time I was baffled,
third time I got quite angry,
agent always rang us 4:30 on a Friday afternoon,
and wanted us to pay for electrician,
fuses kept blowing because of using a hairdryer, fridge was on the same circuit.
A firm NO on the sparky,
and I suggested that the tennant should get a new hairdryer.

The agent really should have been able to work it out.
 
Some places won't let you do "Self Help" where YOU evict the deadbeat. In Virginia, when I was the scumbag landlord I had to evict a deadbeat. 1st, go file for unlawful detainer. tenant has x days to pay up. If not, next, take detainer to court and file for eviction through the court. On court day, if tenant is a no-show, and your lease was legal in your jurisdiction, you win. You then get to go to your place, put former tenants junk on pallets and wrap with protective wrap. Also change the locks. Cops will watch over pallets for a day or 2. Then its OK for anyone to take their junk. Make sure you actually put in your lease the part about self help, and make them initial next to that paragraph.
 
Here's what not to do. Do not rent below market value. My parents had a rental, when it became available, my Mom, (a nurse), had a coworker, (also a nurse), on a limited budget, needed a place for her husband and 2 children. Thinking they were doing the right thing for the family, they rented below market. The renters were perfect in everyway. Paid rent on time, took care of the property too. When tax season came along, Dad filed, and a month or so later the IRS called him in to the local office for an "audit". The IRS wanted to know why the variation in rent from the previous year. He explained the situation with the family, and the lower rent. Well, they didn't accept Dad's explanation, and said he owes taxes based on the previous year/renters payments. So, he had to pay on income never asked for, or received. He then asked why he was penalized for being a good person, helping a family out. The IRS response was in order to have a reduced rent, he would of needed to advertise in the paper, and have a waiting list of renters. Dad sold the rental property as soon as the family he helped moved.
 
jcamero said:
Here's what not to do. Do not rent below market value. My parents had a rental, when it became available, my Mom, (a nurse), had a coworker, (also a nurse), on a limited budget, needed a place for her husband and 2 children. Thinking they were doing the right thing for the family, they rented below market. The renters were perfect in everyway. Paid rent on time, took care of the property too. When tax season came along, Dad filed, and a month or so later the IRS called him in to the local office for an "audit". The IRS wanted to know why the variation in rent from the previous year. He explained the situation with the family, and the lower rent. Well, they didn't accept Dad's explanation, and said he owes taxes based on the previous year/renters payments. So, he had to pay on income never asked for, or received. He then asked why he was penalized for being a good person, helping a family out. The IRS response was in order to have a reduced rent, he would of needed to advertise in the paper, and have a waiting list of renters. Dad sold the rental property as soon as the family he helped moved.
Click to expand...


That sounded very wacko, I feel I missed something there. Has your dad ever been audited before? Is there more to that story? That was like the IRS penalizing a person for not selling a car for as much as they should have. I've been interested in buying a rental or two for years. No experience here but I've heard and read a key point is of course is to screen potential tenants. Here in Texas, I talked to a few people that told me they manage property for $100 a month, that included addressing problems, collecting rent, and being a witness in court if it came down to that, having to do with not paying rent or trashing a place. So I'd consider hiring management. I would think about doing maintenance myself if I could handle whatever job it was without volunteering to let the tenants know I was the owner when I was there, unless they asked, I don't lie to people so I'd tell them if they asked. But yes I'd avoid volunteering to divulge that when I was there. Best to keep no relationship there imo, only biz. Also, here in Tx, I heard that it's best to renew the contract every two years or else there is a remote possibility of some kind law that is similar to something like "squater's rights".
 
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