Rusty Syringes 478 Posted May 13, 2006 We're buying new house, a great little place in the country. Our current house is on the market, but we're thinking about renting out the focker. Has anyone done this? What are the pros and cons? Can you rent it out for more than your monthly mortgage payment? How do you insure it? Does it cost more or less to have insurance on a rental? TIA. Share this post Link to post Share on other sites
gratefulted 14 Posted May 13, 2006 We're buying new house, a great little place in the country. Our current house is on the market, but we're thinking about renting out the focker. Has anyone done this? What are the pros and cons? Can you rent it out for more than your monthly mortgage payment? How do you insure it? Does it cost more or less to have insurance on a rental? TIA. Do not do what I did, do not rent to friends or relatives, get a property mangement company to take care of it, charge whatever the market allows you to, if you can make somewhat of a profit, great. I rented to a friend and ended up letting them slide time after time. I ended up forceably throwing them out after them owing me bout $10,000.00 plus wrecking the house, it was one of the many worst mistakes of my life! DO NOT GET IN ANY PERSONAL RELATIONSHIP WITH YOUR RENTERS!!! Share this post Link to post Share on other sites
Ravens 03 0 Posted May 13, 2006 We're buying new house, a great little place in the country. Our current house is on the market, but we're thinking about renting out the focker. Has anyone done this? What are the pros and cons? Can you rent it out for more than your monthly mortgage payment? How do you insure it? Does it cost more or less to have insurance on a rental? TIA. Many friends of mine have done this. Insurance when you move out will be more as you will have renters, but not that much. Rent = Market value. Whatever you can get. If you go month-to-month - expect to get some 'issues' with the people. Make it clear to the renters that the place is for sale and visitors will be coming to inspect. Try to emphasis they need to keep it orderly & clean. Get a good security depoist because you just might need it. I would say visit regularly [pretend to be fixing something] so you can keep an eye on it. Good luck. Share this post Link to post Share on other sites
Rusty Syringes 478 Posted May 13, 2006 Great advice, guys. No way would I rent to family or friends, and we would go through a property management company, if only so they could conduct a thorough background check of the prospective tenants and handle all that crap. Based on what I'm seeing on the market, and there ain't much in Buttmont right now, we could probably make $400 to $500 over what our monthly note is right now. We would take the house off the market and require a one-year lease with the deposit matching one month's rent. Share this post Link to post Share on other sites
spork in the road 2 Posted May 13, 2006 You might want to look into how renting the property will affect your mortgage payment (on the original property). I know banks charge more for investment (rental) property than they do for a primary residence. Of course if it was just short term I'm not sure how they would find out. Share this post Link to post Share on other sites
Toro 1 Posted May 13, 2006 Don't rent to Canadians. Share this post Link to post Share on other sites
mulletia 0 Posted May 13, 2006 Do not do what I did, do not rent to friends or relatives, get a property mangement company to take care of it, charge whatever the market allows you to, if you can make somewhat of a profit, great.I rented to a friend and ended up letting them slide time after time. I ended up forceably throwing them out after them owing me bout $10,000.00 plus wrecking the house, it was one of the many worst mistakes of my life! DO NOT GET IN ANY PERSONAL RELATIONSHIP WITH YOUR RENTERS!!! I rent from my neighbor who si a close family friend, and while I get away with some things, I am more conscientious of how I treat hsi space because he is close with my family and wouldn't want to disrespect his space Share this post Link to post Share on other sites
dirty dug 0 Posted May 13, 2006 Rent to a frat, they're always very responsible. Share this post Link to post Share on other sites
cgod 0 Posted May 13, 2006 Provide a clause in the rental agreement that the occupants could be thrown out with minimal notice if any geeks were to visit Buttmont and needed a place to stay. Share this post Link to post Share on other sites
mulletia 0 Posted May 13, 2006 if you'd liek to get more exposure for your house perhaps nationally rent it to any usc athlete, they seems to be making headlines lately Share this post Link to post Share on other sites
gratefulted 14 Posted May 13, 2006 I rent from my neighbor who si a close family friend, and while I get away with some things, I am more conscientious of how I treat hsi space because he is close with my family and wouldn't want to disrespect his space I thought they would do the same for me, I was even the godfather to all 3 of thier kids, when I went to throw them out I saw they had 2 new cars and new bikes for all They were not Canadians, they were f'n texans Share this post Link to post Share on other sites
dirty dug 0 Posted May 13, 2006 if you'd liek to get more exposure for your house perhaps nationally rent it to any usc athlete, they seems to be making headlines lately Plus, they always pay their rent. BTW, have you considered turning it into a crack house for additional income? Share this post Link to post Share on other sites
Rusty Syringes 478 Posted May 13, 2006 I meant to say "one-year lease." :dumbass: Share this post Link to post Share on other sites
mulletia 0 Posted May 13, 2006 I thought they would do the same for me, I was even the godfather to all 3 of thier kids, when I went to throw them out I saw they had 2 new cars and new bikes for all They were not Canadians, they were f'n texans I was a month late with my rent once, but then i made it up to my Ll by paying the next three months in advance, he seems to like that and so do I Plus, an unnamed booster always pays their rent. BTW, have you considered turning it into a crack house for additional income? fixed that for ya Share this post Link to post Share on other sites
dirty dug 0 Posted May 13, 2006 I was a month late with my rent once, but then i made it up to my Ll by paying the next three months in advance, he seems to like that and so do Ifixed that for ya It was a named wanna be agent who the family never paid and were evicted, not a booster! Share this post Link to post Share on other sites
mulletia 0 Posted May 13, 2006 It was a named wanna be agent who the family never paid and were evicted, not a booster! right, and that girl sexually assaulted herself while sanchez just happened to be there every single decent player on every D1 football team gets some sort of compensation for being athletes as a buckeye fan I know jim tressel goes recruiting like this: what? I don't know anything about that escalade in your driveway leased in your grandmother's name, with the big bag of money and hot slut in the back Share this post Link to post Share on other sites
sawilson 1 Posted May 13, 2006 Provide a clause in the rental agreement that the occupants could be thrown out with minimal notice if any geeks were to visit Buttmont and needed a place to stay. Share this post Link to post Share on other sites
dirty dug 0 Posted May 13, 2006 right, and that girl sexually assaulted herself while sanchez just happened to be there every single decent player on every D1 football team gets some sort of compensation for being athletes as a buckeye fan I know jim tressel goes recruiting like this: what? I don't know anything about that escalade in your driveway leased in your grandmother's name, with the big bag of money and hot slut in the back Well, the Sanchez case is not as you portray it. Apparently she was waiting for him in is apartment and there is a witness who claims it was definitely consentual. As of now Sanchez has not been charged with anything. I realize there is a butt load of shady things that go on in major college ball, but the Sanchez case, IMO, is a girl who is crying wolf. And I seriously doubt USC had knowledge of the Griffen's deal (Bush's parents), that was outside their control. Share this post Link to post Share on other sites
swirvenirvin 25 Posted May 14, 2006 Make sure you have a postive cash flow is the main thing Thinsg you shoudl include or figure out if about a 7% vacancy so make sure and figure that in to be safe Charge enough so you are covering your mortage( and taxes if not included), your insurance, and any property management company you use. You can always have them take care of teh lawn and and misc things that go wrong in the house, but it would have to be a handyman. Not alwayts a good option because if they break something more than they fix it, they can say well i was trying to fix it myself you cant charge me more $$$ etc. So do it yourself or hire someone to do it all. Usually on your first rental you should do most of it yourself, especially since its your old housde you know it best. Make sure you get credit reports on anyone you consider renting out to, nothing worse then a deadbeat. Pets are usually $25-50 more a month. Your new house should be able to cover your insurance on your rental, if not find a new insurance compoany that does, you can usually cover up to 3 rentals on your home insurance, as your are just covering the structure not what is inside. Not sure who said something about mortage going up, but it will not if you are locked in under your mortage, if you refinanced then it would go up to a higher %, but if you have whatr you have right now and are happy no need to worry. There is a bunch more of stuff this is just off the top of me head just email me for any specific questions hopefully i can answer them Share this post Link to post Share on other sites
Ravens 03 0 Posted May 14, 2006 Oh and Rusty - REQUIRE the tenants to have renter's insurance. HTH Share this post Link to post Share on other sites
TimmySmith 2,782 Posted May 14, 2006 Make sure you have a postive cash flow is the main thing You do not necessarily need a monthly positive cash flow though. Realize that after all tax write-offs, you can see a yearly positive even if you are short each month. I rent a house for about a $200 monthly deficit and get it all back at tax time. Share this post Link to post Share on other sites
Ravens 03 0 Posted May 14, 2006 You do not necessarily need a monthly positive cash flow though. Realize that after all tax write-offs, you can see a yearly positive even if you are short each month. I rent a house for about a $200 monthly deficit and get it all back at tax time. I think people overlook this alot. Depreciation expense on the tax return creates cash flow right there. Plus Rusty can deduct every trip to the Home Depot as a business expense and say it's for work on his 'rental property'. Keep those receipts Rusty. Share this post Link to post Share on other sites
remote controller 138 Posted May 14, 2006 Being a landlord is not easy. Make damn sure you wanted the added stress. Some very good advice above. Share this post Link to post Share on other sites
Walter34 3 Posted May 14, 2006 I think people overlook this alot. Depreciation expense on the tax return creates cash flow right there. Plus Rusty can deduct every trip to the Home Depot as a business expense and say it's for work on his 'rental property'. Keep those receipts Rusty. The other advantage with this is that continue to accrue equity on the old house. When you do sell, you own more of it than the bank. No students. Try and make sure its as little work as possible. See several rental agencies and see what the deal is. Rent it out to TRF and his smokin ass secretary! Share this post Link to post Share on other sites
Super Cubs 134 Posted May 14, 2006 How many sq feet? What part of Buttmont is it in? And how much storm damage did it get from Rita? Share this post Link to post Share on other sites
avoiding injuries 1,238 Posted May 15, 2006 I have two rentals. One has been great with very minimal up keep. The other has been a nightmare. It comes down to your tenants. Choose wisely. Do you see the property appreciating much in the next few years? That would be the only reason I would rent it out unless you are considering moving back. I needed to let my mtg co and ins co know that I was renting it out. You could cut corners, but if something happens to a tenant or visitor on the property it won't be worth it. I am lucky enough to get more in rent then my mtg+ins+taxes. You do get a tax break, but you also have to claim the rent as income so it balances out. Share this post Link to post Share on other sites