slumlords, get in here: renting out your house

[redkow97]

At the very least, I would include a basic (and binding) arbitration clause to keep expenses reasonable if things do go south.

[4DAIVI PAI2K5]

Do you leave heaping piles of trash on your floorboards? That's where I was getting to.... we have a pos truck too that doesn't run and our house is immaculate, no trash on floorboards

yep mostly junk mail lol my house is as clean as it can be with a 20 month old running around .

The tags are killing me rofl.

[baptizo]

Nice pad and kinda pricey for rent but I don't live in Mentor.

I wouldn't rent it unless you're absolutely certain they wouldn't trash it. Otherwise. take the sage advice given by the others and sell, sell, sell.

BTW, if you were selling, that's a real nice first home for a young couple but a little too big for a single guy like myself (but I sure do like the attached garage).

[cOoTeR]

Maybe you should put a clause in the lease that if their pet trashes anything in your house you get to eat said pet infront of them.

[Mary#17]

With so many foreclosures, the rental market is very tight right now so the price is probably in line.

Do run credit and background checks - there are lots of online services that will do this for you for a pretty small fee. Verify their employment. Call previous landlords for references.

Charge for pets. Assume the place will get damaged and hope it doesn't.

We built a new house just before the market collapsed so selling our old house was really difficult. Two mortgages for two years. Not fun. The second year we rented our house out and had a really good tenant. Your location has a lot to do with dictating what type of tenant you will have. I live in a nice city, I had nice people looking at the house. My parents are truly slum lords (didn't start that way but the part of town deteriorated) in the heart of Cleveland and their tenants are beyond horrible. You also may want to look into how any disputes are handled. I assume that Mentor has it's own court system but if you have to go through Cleveland for tenant disputes, I'd run as fast as you can.

A good property management company can help you with all of this.

Good luck.

Mary

[jbot]

hmmm thanks guys! i do have some very limited, but firsthand, experience with renting out a home... and they were both negative. i wanted to sell at first and give my retirement account a nice bump (or do something stupid like buy a nicer toy car and build a detached garage) but decided to give it a shot. i will say that for every negative experience, there are probably at least 5 or more positive stories... otherwise, there wouldn't be a huge market for renting out houses.

I think the big key differences will be being aggressive about screening and just generally not needing to rent it out at all (ie, i can be very choosy). i have every expectation of failure, but am willing to learn so i can prevent it if possible.

any more constructive criticisms and advice based on first hand experience (positive and negative) would be very much appreciated.

trm8tr, i'll hit you up for that lease you have so i can compare it with the one i found and see if i want to make any additions/subtractions.

redkaw, i'll let you know if i need some help with reviewing the lease if the offer is still open at that time (I'm sure you're busy with school and work and whatnot)

thanks gents, keep it coming

[jbot]

God you're nuts, dogs are okay woof, cats are ok purr. I love you man.

1 thing I don't get/might want to change, you mention "services" in the rent price, then go on to say that renter is responsible for all utilities. ?? Just not sure what the difference would be. I know Ive looked into renting my place out to people too, and I would not let them even put water or trash in my name. Only theirs. Just a tid bit I saw in the ad.

oh, and "services" mean snow plowing, landscaping, etc. i expect my tenants to mow the lawn and such. if they don't, i will have a clause in the lease that their rent will go up to include those items. utilities will HAVE to be in their name. I'll think about changing the wording around though.

[madcat6183]

Gotcha, maybe throw in annual swingers parties in the lease too. Small print, then only rent to some hotty, or lesbos.

[abdecal]

I was thinking of renting my house for a while. It was to big for just me but the gf ended up moving in.

I asked the same types of questions from people and got the same answers. Everyone told me to just sell. Dealing with tenants can be a nightmare.

Currently my brother is wanting to move in with his wife and daughter because I have two empty bedrooms. It sounds horrible but I had to tell him no. He has a bad history of not paying for apartments, has screwed our Mom over when she co-signed for him, and there's no way he's going to pay his younger brother.

I would say just don't deal with rent. I've never been a landlord but have heard far to many horror stories.

[ShawnR]

I have 2 rental houses so far and it has been a pretty good experience so far (2+ years). Both renters seem pretty stable and don't seem like they are going to be going anywhere soon. One consistently pays rent late, but with the added $10/day late fee, I am okay with it.

Both have pets & kids. Go with your gut on the interview process. You will get probably get enough that you can be picky on who to choose. It is MUCH better to let it sit empty for a month rather than trying to hurry and fill it with somebody that you will regret.

I can shoot you a copy of our lease agreement if you want to give it a look.

[slingingchic]

yep mostly junk mail lol my house is as clean as it can be with a 20 month old running around .

The tags are killing me rofl.

Junk mail isn't the trash I've seen.... I might have to start a thread on what I'm talking about with several pictures I have junk mail floating on backseatings and maybe a bridal magazine. Guess they didn't get the hint I got married 8 years ago

[jbot]

I have 2 rental houses so far and it has been a pretty good experience so far (2+ years). Both renters seem pretty stable and don't seem like they are going to be going anywhere soon. One consistently pays rent late, but with the added $10/day late fee, I am okay with it.

Both have pets & kids. Go with your gut on the interview process. You will get probably get enough that you can be picky on who to choose. It is MUCH better to let it sit empty for a month rather than trying to hurry and fill it with somebody that you will regret.

I can shoot you a copy of our lease agreement if you want to give it a look.

i'll send you a PM with my email if you don't mind sending the lease for me to look at

[ScubaCinci]

I didn't read all the responses but I currently have rental property. Set up an LLC or some other limited liability entity to indemnify yourself from lawsuits etc. Don't wait!

[4DAIVI PAI2K5]

Coshocton isn't Mentor.

Dont hate.

[jbot]

I didn't read all the responses but I currently have rental property. Set up an LLC or some other limited liability entity to indemnify yourself from lawsuits etc. Don't wait!

will it be even possible to do that? the house is generally owned by the landlord, non-professional landlords (ie, someone like me with only 1 house to rent) will be co-mingling their personal funds all the time. the primary agent the tenant will deal with is the owner/landlord, and the landlord will be the owner of the LLC. i know a bit about s-corps and in general how incorporating works, but trying to understand how an LLC would help in this scenario.

[Uncle Punk]

An LLC in your case is of very little value to single family dwellings for a multitude of reasons. That said you own the property outright so you could shield yourself from some exposure. Don't waste your time in this situation, carry the proper insurance, address tenant concerns and document the course of action, you have lived in the house so you have assumed any risk yourself. The LLC won't shield you from loss and that is your greatest risk exposure.

If you are trying to mitigate your loss in a declining market by waiting for prices to come back be careful of increasing your loss by doing this, you have bought in the same market so it’s a wash. You can make money at this but not without causing a time suck at what you could be doing that actually makes money. A single family dwelling isn't worth the distraction. I could write a full page of personal experience on his subject let alone what I have seen others go through. Your case is not one that ends well. This is not to say that people don't make money doing this, I know several. Your situation doesn't end well unless you work the shit out of it. Contracts don't mean shit, I have never lost a dispute but disputes happen in the vast majority of cases.

Sell, sell, sell.

[OsuMj]

Characterizing your renter based on their car is ridiculous. I ALWAYS leave my rental properties in WAY better shape than when I got it and my car is shit and I usually have about 6 coffee cups on the floor.

I agree with UP. Being a landlord is going to suck. Most tenants don't care. If you do rent it out, just make sure that you do a walk through with them before they move in and take pictures/video of every inch of your house because that's the only way to prove damage and its your responsibility to prove that they damaged your house, not the other way around. Also, make sure you do a walk through with them a week or 2 before they move out and let them know what you expect to be repaired/cleaned.

You're allowed to do an occasional walk through to check on the house. If you're worried about it, you could make sure that your prospective renters understand that you want to keep the house in good shape and plan to do a walk through once every few months just to make sure nothing is leaking or broken.

[jbot]

An LLC in your case is of very little value to single family dwellings for a multitude of reasons. That said you own the property outright so you could shield yourself from some exposure. Don't waste your time in this situation, carry the proper insurance, address tenant concerns and document the course of action, you have lived in the house so you have assumed any risk yourself. The LLC won't shield you from loss and that is your greatest risk exposure.

If you are trying to mitigate your loss in a declining market by waiting for prices to come back be careful of increasing your loss by doing this, you have bought in the same market so it’s a wash. You can make money at this but not without causing a time suck at what you could be doing that actually makes money. A single family dwelling isn't worth the distraction. I could write a full page of personal experience on his subject let alone what I have seen others go through. Your case is not one that ends well. This is not to say that people don't make money doing this, I know several. Your situation doesn't end well unless you work the shit out of it. Contracts don't mean shit, I have never lost a dispute but disputes happen in the vast majority of cases.

Sell, sell, sell.

re: the LLC what you said was what i thought, but still would like to hear from people who have done it and why they do it and in what application

re: declining market/mitigating losses- the current value is about what i paid for it several years ago. my main interest is not in recouping potential losses or waiting out the market... but those are important secondary reasons. main reason to keep the house is to have a fall back plan in case of sudden change in my business, and to have a house that is paid off that won't be lost during bankruptcy procedures. it doesn't hurt that the Mentor area will continue to become more popular (at least, in my opinion).

i'm set on trying with at least 1 tenant that i will patiently and carefully screen. with that in mind, things that you did in your experience that was successful would be helpful.

i had shown the house to some lady who was nice and came right on time a week ago, and last night, i had a no call no show (even after i had called an hour prior to confirm they were coming). i'm expecting more of that lol

[Uncle Punk]

You have more issues that need professional help. If the house is already at risk in business failure you can't protect it, if it isn't get working on that LLC or do a creative sell for a loss, then protect the remaining money in several ways easily laid out with a competent financial planner or accountant. Read this again as sell and even more so now that I know you have exposure for other losses with known personal assets.

I have found no real formula for success in renting, trust me I do everything I can to limit bad outcomes but still end up in court more than not. I never lose but never collect either, renters usually don’t have assets and most don’t have jobs that they can’t walk away from when garnished. I have had luck with military and can imagine that long time public employees would work out.

Forget appointment showings. Set up an open house, leave agreements for prospectives to look at and applications for interested parties. Go over them at your leisure and reshow if needed. Trust me you will save a lot of time doing this.

[Uncle Punk]

Sell, sell, sell.

Every layer of protection you add is additional expense up front or on the back end. I would check with the local small claims court to see if an LLC can defend itself in matters without in needed to be kicked up to a higher court.

[jbot]

UP: all very good advice. except the hurtful feelings parts. i forgive you though.

IP: i've been lax about it, but want to do something with it. i'll see where i end up

[Uncle Punk]

You have more issues that need professional help.

This offends you?

[TRMN8TR]

If you are set on renting, maybe look into joining a landlords association. They can provide legal and general info usually for pretty cheap.

[madcat6183]

Tags = winning, why do I always miss those on your threads?

[jbot]

This offends you?

your inky blackness does