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slumlords, get in here: renting out your house


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$1300 a month? is that reallly the going rate to rent a house that size these days? Thats $350 more than my mortgage. Not knock on you just i have been out of the renting game for a while and didnt realize rent had jumped that high.Last house i rented was 1400sqft in 2000 for $675 a month.

This is what I was wondering.

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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.

I wholeheartedly disagree. While insurance on the property covers loss from theft/fire/damage, it does little to protect you (the landlord) from litigation. i.e. the tenant notifies you of some carpet that has come loose and needs repair. While awaiting said repair, the tenant's mother who is visiting trips on the carpet and breaks her hip. Hello lawsuit which you may very well lose depending on your actions in response to the initial complaint and the timing. Unless you have a very large umbrella polucy that covers such things, the plantiff has every right to pursue all and any personal assets the landlord has to collect money owed as part of a settlement. Don't think it won't happen. We live in one of the most litigious societies in the world and everyone always wants you have.

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I wholeheartedly disagree. While insurance on the property covers loss from theft/fire/damage, it does little to protect you (the landlord) from litigation. i.e. the tenant notifies you of some carpet that has come loose and needs repair. While awaiting said repair, the tenant's mother who is visiting trips on the carpet and breaks her hip. Hello lawsuit which you may very well lose depending on your actions in response to the initial complaint and the timing. Unless you have a very large umbrella polucy that covers such things, the plantiff has every right to pursue all and any personal assets the landlord has to collect money owed as part of a settlement. Don't think it won't happen. We live in one of the most litigious societies in the world and everyone always wants you have.

If you don't respond to the situation above you will lose in court with or without an LLC that’s why I said you need to respond and document the resolutions. Personal negligent injury will allow the value of the property to be attacked whether the principals of the LLC are shielded from liable or not. The vast majority of tenant/landlord disputes end up in small claims court where you have to be able to defend yourself with or without a lawyer, in my area an LLC can’t defend or go after litigation in small claims court which adds unnecessary expense to hire a lawyer for the higher court. LLCs do have value and in this case I think he should have one. Try to originate a mortgage on a single family dwelling with an LLC and you will eat up any gain by the added rate. Banks don't like to loan to an entity that is shielded from established recourse. Multi-family dwellings and partnerships practically require an LLC but this isn't the case here and if he didn't have mitigating circumstances an LLC wouldn't apply with the exception of an unmortgaged property.

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i am still open to selling too. i would probably list it for about 135-140

I am looking to refinance my current shack and also have my mortgage guy run my soon to be wife's numbers as well in hopes of buying another house in her name. I will let you know. Thanks!

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If you don't respond to the situation above you will lose in court with or without an LLC that’s why I said you need to respond and document the resolutions. Personal negligent injury will allow the value of the property to be attacked whether the principals of the LLC are shielded from liable or not. The vast majority of tenant/landlord disputes end up in small claims court where you have to be able to defend yourself with or without a lawyer, in my area an LLC can’t defend or go after litigation in small claims court which adds unnecessary expense to hire a lawyer for the higher court. LLCs do have value and in this case I think he should have one. Try to originate a mortgage on a single family dwelling with an LLC and you will eat up any gain by the added rate. Banks don't like to loan to an entity that is shielded from established recourse. Multi-family dwellings and partnerships practically require an LLC but this isn't the case here and if he didn't have mitigating circumstances an LLC wouldn't apply with the exception of an unmortgaged property.

True. However, I guess the one point I'm trying to make is with an LLC anyone suing you can get $ from the LLC and the LLC holdings (i.e. property) but the landlord, his assets (i.e. house, car, etc) are out of reach. Without an LLC you can quickly wind up broke AND homeless. I guess it just depends on the levels of risk you are willing to expose yourself to so as you state it's not compulsory but most attorneys/financial planners will highly recommend it.

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Since I've moved to TN, I've been renting my house. It's been over two years now and I have no complaints. I did have a fairly simple contract drawn up and I do pop in occasionally with a days notice just to see how things are. The biggest difference with my situation is my tenants we co workers from my previous job. I was aware of their previous residence and lifestyle. I also had an idea of their wages and was confident that they would be good renters. I'm glad to have them and hope they don't plan to leave anytime soon as I'd be uncomfortable trying to find strangers to occupy my house.

On the flip side, my father has been in the rental business for decades and over-all has had an overly positive experience. Occasionally there is a bad tenant, but he's had far more good than bad. The bad were expensive to return to rentable condition though.

Sent via mobile

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Talk to a lawyer and then talk to the sherriff. Be 100% sure you understand what it takes to evict someone and what you can or cannot recover.

I would also suggest the LLC and rent out through the LLC as a way to protect yourself. Especially if you do your own repairs and something screws up and results in an injury.

Be sure you house is up to current code and be 100% sure you have no emotional attachment to the place.

Charge more. In theory, people that can afford more should keep the house up. Though, that is just a theory. Be sure to get 1 or 2 months rent in escrow to cover clean up and damages. The more people have to risk losing for damage, the less likely they will be to damage the place. Theory again.

I have thought of doing it myself. Good tenant stories and horrid stories are plentiful.

Best of luck to you but in the end, this is a financial transaction. Can you take the $$ you would get in a sale, invest in the market and get a greater return on your investment?

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If all else fails, look at the car they drive, it will tell you how your house will look in a very short time!

This is the first think I look at when they come to rent one of my property's IT"S TRUE check the CAR

SOOOO SHITTY!

Charge more. In theory, people that can afford more should keep the house up. Though, that is just a theory. Be sure to get 1 or 2 months rent in escrow to cover clean up and damages. The more people have to risk losing for damage, the less likely they will be to damage the place. Theory again.

If you're suggesting he collect more than a months rent for security deposit, keep in mind that you are required to pay back interest on that (5%).

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  • 3 weeks later...

well, after interviewing a dozen or more people, i finally found a family i liked and am willing to rent to. husband and wife with kids and pets. husband is a army vet who has a steady job at a big corp nearby. the wife works for some other company, but the husband makes more than enough for them to live on.

we'll see how it goes. if it's a nightmare, i'll evict and sell. if they are great tenants, i'll keep them around for as long as they want to stay and probably rent it again, taking my time and screening people that i didn't like.

i'll update this thread with any new developments.

thanks for all the input. let's hope i can prove the nay sayers wrong, and that my general faith in humanity is not misplaced.

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Good luck with this. I had a nice couple in my house in Garfield with kids and good jobs. They destroyed the house took off in the middle of the night with 2 months owed rent. And did about $10000 worth of damage to the house which broke my bank account and eventually made me loose the house. Yeah renting out a house is a mother fucker. Kick them out now and sell it before you get hosed.

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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.

Didn't mean to offend you and there are exceptions to every thing Hell I drive a shitty truck and I own 4 houses Just ONE of the MANY things I take a look at when letting some one rent from me as it seams to work for me

But on the other hand if they own a motorcycle no need to check any more......................... there in

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I would also support the idea of an LLC, but having one won't help if it's merely a ruse to avoid personal liability.

If the LLC is your "alter ego," you can pierce the corporate veil and hold the owners personally liable. Usually that requires some illegal activity by the "corporation," but an under-capitalized corporation is in violation of SEC laws, so that can count.

All I'm pointing out is that incorporating isn't necessarily an absolute shield, and that it creates certain obligations (like filing, having articles of incorporation, listing a principle place of business, naming a person who can be served on the corporation's behalf, outlining a capital structure with regard to stock, etc.)

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Good luck with this. I had a nice couple in my house in Garfield with kids and good jobs. They destroyed the house took off in the middle of the night with 2 months owed rent. And did about $10000 worth of damage to the house which broke my bank account and eventually made me loose the house. Yeah renting out a house is a mother fucker. Kick them out now and sell it before you get hosed.

Well, here's where I'm coming from:

I own the house out right

I don't need to rent it out

So if that tells you anything about my mindset in being patient and picky about renters, I was pretty damn picky. I actually had a realtor I had hired in the past lined up as a tenant, but she bailed last minute for a better location and price (couldn't blame her and we didn't have anything signed so no hard feelings from me except in my pants cause she is kinda hawt lol).

btw, I had 2 other very interested renters who were willing to pay my listed monthly rental price but I went with this family who talked me down to 1200/month.

I'm going to do a walk through a few weeks after they move in to see how they're doing and to see how their pets are doing.

I'm realistic, I know there's a chance this family will ruin my shit and run off a couple months in, but I dunno. I hope I'm a better judge of character than that. They really seem like good hard working people. We will see. Worst case scenario, they destroy everything, and we will have a good laugh at my expense. A price must be paid for naïveté... Lets just hope I get lucky.

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I went through over a dozen people before we settled on the one we picked. They knew our neighbors also which they got a great referral from. Mine stayed for over a year with no problems then all of the sudden took off?! Even the neighbor who knew them didn't know where they were or why they left so sudden(or so they said) You are in a much better place with not having a payment on the house still. So that greatly cuts down your risks. You won't loose the house like I did but would suck to repair the damage when it's empty again.

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Good luck with this. I had a nice couple in my house in Garfield with kids and good jobs. They destroyed the house took off in the middle of the night with 2 months owed rent. And did about $10000 worth of damage to the house which broke my bank account and eventually made me loose the house. Yeah renting out a house is a mother fucker. Kick them out now and sell it before you get hosed.

To prevent this have scruit sneak in one night to hide one of those high tech GPS tracking systems he has on his stuff.

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