My wife's mother passed away a couple of years ago and we now own a second house. It is on the same property we live on, 13 acres. We are thinking about turning it into a rental property if we can find the right people to rent it. We have never owned any rental property, so I'm not real sure if I want to get into it. If any of you on here own rental houses, is this a good idea? Any help would be appreciated.
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Never been an owner, but I did a decent amount of research. Being on the property will be good and bad. You can see what is going on, but also you an see everything going on. The renters will also know where you live. Management companies will do the legwork of background checks, etc but also charge for the service. Consult an attorney, but I would split the rental from your current property and put it in an LLC if it was mine. -
I say go for it. Passive income is never a bad thing. As long as you screen the tenants properly, the horror stories can be avoided. My wife and I just bought a duplex, and are going to live in one side and have the tenants on the other side pay for our mortgage. Short term rental (Airbnb/vrbo) would be another option depending on the area. Same thing applies with this, screen the people wanting to rent it to avoid potential headaches. With short terms you have the potential to have higher monthly cash flow than a long term rental if it’s in the right area. Just things to consider/food for thought!Comment
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We did as TB mentioned above. We put the rent house in an LLC. The renters you find are the determining factor. Some are great, some are not. We are in a small town and have only rented to assistant band directors. The upside is, we're never looking for renters. The downside is, we rent to them no matter who they are. It works well enough for us. If they're not good renters, they're usually not good teachers and only stay a year anyway.Comment
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Does it have a pool? If so…thatd be a hard no.
You have to have a good tenant who will follow rules and take care of the house like its their own.
Make all applicants fill out application. That will be the first litmus test as whether someone can follow simple instructions or lies. If an applicant cant follow and fill out properly an application or lies on an application…that brings to question whether they will be able to follow lease rules as a tenant and not destroy the house. All smokers lie…no one ever smokes on applications
Back ground check.
Credit check.
Rental history check.
Employment history check.
If any one check whiffs foul…decline and move on.
A pattern will emerge one way or another. Can someone follow rules or no?
Make deposit at least one months rent.
Pet deposit, an additional one months rent. Pets tear up alot of things and often one months rent value as pet deposit doesnt cover costs of reparations from pet damage. You could save yourself and future tenants alot of grief by simply saying blanketly “NO PETS”.
Good luck MrBull.Comment
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Check into AirBNB or Evolve for temp rentals. Those can be gold mines set up right. If it doesn't work it's easy to end it and no long term lease to be locked into.Comment
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yep
yep make it as difficult as possible. Let them understand that you live next door. Its a one year lease and will be reevaluated on a yearly basis. Put in clauses for anything that you dont want to happen. If that happens then eviction wll happen and complete loss of deposit. This will scare alot of people off but in this market there is alot of people looking. I would make it a high deposit as well. 5K. THis will make people think twice about renting it.Originally posted by Briar Friar View Post
It might not rent with this, but its up to them.Comment
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If they have outside pets, they will be inside pets as well. When they move out, you will have to replace the carpet due to pets, guaranteed.Comment
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Hire a management company. There’s usually a real estate broker in town who does it, and it’s well worth the fee not to have to deal with leasing and repairs. He handles everything for us.Comment
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Lots of good information on this post. I’ve had a rental property beside my residence for about 3 years. We have done all the background checks and been picky about who we rent too and haven’t had a problem. We only rent to 40+ year olds with good credit. It’s been the best investment I’ve ever made, and we get to pick our neighbors.Comment
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What Briar Friar said as well as collect applications for 10 days to 2 weeks. This will give you time to check references and gather enough applications to pick who is best for the house. Also,we have a clause in the lease agreement that we will enter the house and change the A/C filter and look under sinks for leaks each month on the 1st week. That way you know filter is changed,no leaks and condition of interior.Comment
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Good tenants will make all the difference in the world!!Comment
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Getting into the rent house business is the best business decision I ever made. It’s not too hard to be successful in it , however one can mess it up. Theres tons of free information on how to be successful with it and how to manage your risk.Comment
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Be a renter up til this year, make sure you have money set aside for a lot of repairs before getting tenants. Don't use outside maintenance hire your own people when needed or your will get overcharged. Screen tenants and have a good relationship with them if you want them to take care of your house. Get 2 moths rent deposit plus pet if you allow as well. I have had only 3 good landlords out of a dozen places I rented. The three were quick to fix broken items others patched or dragged out repair for months. Ban any junk or broken vehicles from sitting on land for more than a short while and yard maintenance must be maintained. Oh and be prepared to patch a lot of holes in walls when ever tenants move.Comment
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