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Cdub100

Any Landlords here?

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We are building a new house and I decided I want to rent out my current house. I plan to use a Property Management Company to run the day to day. 

Any advice?

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I'm not a landlord, but I would do a credit/background check on every applicant. Make them pay for it. The risk of letting the wrong person live there is too great. You don't want to be scraping feces off the ceilings after they got out of paying rent for a year

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15 minutes ago, Frozenbeernuts said:

I'm not a landlord, but I would do a credit/background check on every applicant. Make them pay for it. The risk of letting the wrong person live there is too great. You don't want to be scraping feces off the ceilings after they got out of paying rent for a year

That's why I'm hiring a property management company to do all that for me

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Thinking about doing this as well.  Its that, rent out Air BnB style or sell.  What is the property mgmt co charging?  

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My BIL and I had some rental houses and condos when I lived in CT.  We also rehabbed and flipped houses, which was more profitable.  

Are you moving away from the area and need someone local to take care of things?  

Will this be a leased property or a short term vacation rental?

Paying a management company doesn’t really erase the headaches of being a landlord.  You won’t get calls about flooded basements or broken toilets in the middle of the night, but whatever problems arise will eventually be yours to deal with.  

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45 minutes ago, Frozenbeernuts said:

I'm not a landlord, but I would do a credit/background check on every applicant. Make them pay for it. The risk of letting the wrong person live there is too great. You don't want to be scraping feces off the ceilings after they got out of paying rent for a year

Also set the credit score requirements high enough to weed out the riff raff. 

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23 minutes ago, Herbivore said:

Thinking about doing this as well.  Its that, rent out Air BnB style or sell.  What is the property mgmt co charging?  

Talk to your insurance provider before you decide to do a short term rental.  
 

Also check with your city/town to make sure you can do it legally.    
 

There’s a lot of backlash against short term rentals cropping up in residential hoods. 
 

All the towns along the Lake MI Shore are dealing with this issue now.   

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3 minutes ago, vuduchile said:

Talk to your insurance provider before you decide to do a short term rental.  
 

Also check with your city/town to make sure you can do it legally.    
 

There’s a lot of backlash against short term rentals cropping up in residential hoods. 
 

All the towns along the Lake MI Shore are dealing with this issue now.   

thanks vudu..good thoughts.  I'm in Salem, MA...Witch Trial city, so very touristy...there are a lot of other air bnbs available.  

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1 minute ago, Herbivore said:

thanks vudu..good thoughts.  I'm in Salem, MA...Witch Trial city, so very touristy...there are a lot of other air bnbs available.  

Also check state laws, as they might conflict with local ordinances.  
 

In MI, businesses are not permitted in R-1 hoods, yet half the places on my block are short-term rentals.  It’s the same all over town and many are not registered.  This place is party central during the summer and we plan to turn our place into a short term rental when we retire.  
 

But, if the backlash continues or too many govt restrictions are placed on us, it might not be a great strategy.    
 

So much depends on the local officials and who knows where their heads will be in 10 years.   

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 It a racket I would not want to get into right now. I’m sure property taxes are going to be on the rise  and try and evict someone after all this. 

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3 hours ago, Herbivore said:

Thinking about doing this as well.  Its that, rent out Air BnB style or sell.  What is the property mgmt co charging?  

10% of monthly rent

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2 hours ago, vuduchile said:

My BIL and I had some rental houses and condos when I lived in CT.  We also rehabbed and flipped houses, which was more profitable.  

Are you moving away from the area and need someone local to take care of things?  

Will this be a leased property or a short term vacation rental?

Paying a management company doesn’t really erase the headaches of being a landlord.  You won’t get calls about flooded basements or broken toilets in the middle of the night, but whatever problems arise will eventually be yours to deal with.  

I'm moving 10 miles away.

Leased.

Understand, but the PM takes care of everything and I get a bill at the end of the month. Anything over 500ish is talked about.

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"Images" by Tyrone Green :Mr-T:

Dark and lonely on a summer's night 
Kill my landlord 
Kill my landlord 
Watchdog barking 
Do he bite? 
Kill my landlord 
Kill my landlord 
Slip in his window 
Break his neck 
Then his house 
I start to wreck 
Got no reason 
What the heck 
Kill my Landlord 
Kill my landlord 
C-I-L-L 
my l a n d l o r d 

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:wave:

we do everything ourselves. We live within 1 mile of them. Why pay one months rent and 10% of rental income to someone for stuff you can do yourself :dunno:

 

 

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3 minutes ago, edjr said:

:wave:

we do everything ourselves. We live within 1 mile of them. Why pay one months rent and 10% of rental income to someone for stuff you can do yourself :dunno:

 

 

Cause I don't want to do it myself.

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19 hours ago, Cdub100 said:

I'm moving 10 miles away.

Leased.

Understand, but the PM takes care of everything and I get a bill at the end of the month. Anything over 500ish is talked about.

Gotcha.  Keep an eye on the below 500ish stuff.  That nickel and dime racket can erode your profits if you're not careful.  I've seen it from both sides. 

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6 minutes ago, vuduchile said:

Gotcha.  Keep an eye on the below 500ish stuff.  That nickel and dime racket can erode your profits if you're not careful.  I've seen it from both sides. 

For sure. Luckily for me there are lots of PM companies around and this guy came highly recommended. If he does nickley and dime me I'll just switch companies. Also since I've lived in this house for 12 years I know what does and doesn't need fixing.

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18 hours ago, Big Guy said:

"Images" by Tyrone Green :Mr-T:

Dark and lonely on a summer's night 
Kill my landlord 
Kill my landlord 
Watchdog barking 
Do he bite? 
Kill my landlord 
Kill my landlord 
Slip in his window 
Break his neck 
Then his house 
I start to wreck 
Got no reason 
What the heck 
Kill my Landlord 
Kill my landlord 
C-I-L-L 
my l a n d l o r d 

Please tell me that "C-I-L-L" is a typo on your part. Otherwise, JFC. 

Edit.  Nevermind!   Just looked it up. :lol:

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3 minutes ago, DonS said:

Please tell me that "C-I-L-L" is a typo on your part. Otherwise, JFC. 

It is a fake character by Eddie Murphy on SNL, so it is just a joke. 

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1 minute ago, Patriotsfatboy1 said:

It is a fake character by Eddie Murphy on SNL, so it is just a joke. 

Yeah, I edited my post after I looked it up. 

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4 minutes ago, DonS said:

Yeah, I edited my post after I looked it up. 

I looked for the video, couldn't find a good one

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I used a management company for a few years and while it did make the process extremely easy, the cost wasn’t worth it. 
My management company charged a months rent if they found your tenant and then 8% per month to do the managing. The background/credit check was the biggest help, but they advertised just like i did. 
They also reported every dollar of rent to the IRS, so don’t think about under reporting the rent income you take in. 
They offered to handle Maintinance, but they charged by the hour from the time the person left the office until they returned. Not while they were in the house. I ended up doing the repairs myself or hiring out someone. Not a huge deal, but I expected the management company to play a better role with that. 
I could go on and on, but it is MUCH more profitable to do it on your own. 
 

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5 minutes ago, avoiding injuries said:

I used a management company for a few years and while it did make the process extremely easy, the cost wasn’t worth it. 
My management company charged a months rent if they found your tenant and then 8% per month to do the managing. The background/credit check was the biggest help, but they advertised just like i did. 
They also reported every dollar of rent to the IRS, so don’t think about under reporting the rent income you take in. 
They offered to handle Maintinance, but they charged by the hour from the time the person left the office until they returned. Not while they were in the house. I ended up doing the repairs myself or hiring out someone. Not a huge deal, but I expected the management company to play a better role with that. 
I could go on and on, but it is MUCH more profitable to do it on your own. 
 

Agreed

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Michigan Supreme Court has now ruled on the short term rental issue in an R-1 zoned district.

"We thus conclude that plaintiff’s use of her property was not a permitted use of a single-family dwelling under defendant’s ordinance. For this reason, we AFFIRM the Court of Appeals judgment."

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I posted this in the "defund the police" thread but it's applicable here.  Definitely be concerned about any woke laws that could be forced on you as an evil "landlord":

I truly am beginning to wonder if liberal lawmakers suffer from that rare condition where they can't visualize things in their brain (no "mind's eye").  Time and time again they seem shocked at the inevitable consequences of their woke laws that any non-retarded person can see coming from a mile away. 

Seattle City Council is a textbook example.  "Lack of affordable housing" is a "crisis" in Seattle.  To combat this crisis they pass huge property tax increases and act outraged when property owners (aka landlords) increase the monthly rent by same amount.   They also make it illegal for landlords to check for any past CRIMINAL activity and also MUST accept the first "qualified" applicant that responds.  To weed out the dregs of society they simply crank up the credit score requirements, making it even harder for folks to get housing if they don't have an exemplary credit history.

Rinse and focking repeat. 

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1 minute ago, DonS said:

I posted this in the "defund the police" thread but it's applicable here.  Definitely be concerned about any woke laws that could be forced on you as an evil "landlord":

I truly am beginning to wonder if liberal lawmakers suffer from that rare condition where they can't visualize things in their brain (no "mind's eye").  Time and time again they seem shocked at the inevitable consequences of their woke laws that any non-retarded person can see coming from a mile away. 

Seattle City Council is a textbook example.  "Lack of affordable housing" is a "crisis" in Seattle.  To combat this crisis they pass huge property tax increases and act outraged when property owners (aka landlords) increase the monthly rent by same amount.   They also make it illegal for landlords to check for any past CRIMINAL activity and also MUST accept the first "qualified" applicant that responds.  To weed out the dregs of society they simply crank up the credit score requirements, making it even harder for folks to get housing if they don't have an exemplary credit history.

Rinse and focking repeat. 

I live in MAGA country.

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14 minutes ago, avoiding injuries said:

I used a management company for a few years and while it did make the process extremely easy, the cost wasn’t worth it. 
My management company charged a months rent if they found your tenant and then 8% per month to do the managing. The background/credit check was the biggest help, but they advertised just like i did. 
They also reported every dollar of rent to the IRS, so don’t think about under reporting the rent income you take in. 
They offered to handle Maintinance, but they charged by the hour from the time the person left the office until they returned. Not while they were in the house. I ended up doing the repairs myself or hiring out someone. Not a huge deal, but I expected the management company to play a better role with that. 
I could go on and on, but it is MUCH more profitable to do it on your own. 
 

You're probably right, but I just don't want to deal with it. So long as I'm getting positive cash flow that's what is most important to me right now.

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56 minutes ago, Cdub100 said:

You're probably right, but I just don't want to deal with it. So long as I'm getting positive cash flow that's what is most important to me right now.

How much equity and how much over your mtg is your rent? (If you don’t mind)

After the management company, taxes, insurance, repairs and wear and tear...there isn’t a whole lot of margin. 

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4 minutes ago, avoiding injuries said:

How much equity and how much over your mtg is your rent? (If you don’t mind)

After the management company, taxes, insurance, repairs and wear and tear...there isn’t a whole lot of margin. 

I'm refing to a 30 year fix. After PM fee, taxes and insurance I will pull in $500-700 per month I will take 12% of that and set aside for repairs. I've replaced the major stuff on my house other than a roof. The rest will be used to purchase another property at some point. 

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1 hour ago, avoiding injuries said:

I used a management company for a few years and while it did make the process extremely easy, the cost wasn’t worth it. 
My management company charged a months rent if they found your tenant and then 8% per month to do the managing. The background/credit check was the biggest help, but they advertised just like i did. 
They also reported every dollar of rent to the IRS, so don’t think about under reporting the rent income you take in. 
They offered to handle Maintinance, but they charged by the hour from the time the person left the office until they returned. Not while they were in the house. I ended up doing the repairs myself or hiring out someone. Not a huge deal, but I expected the management company to play a better role with that. 
I could go on and on, but it is MUCH more profitable to do it on your own. 
 

Kinda what i said

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31 minutes ago, edjr said:

Kinda what i said

You guys are right, I just don't want to deal with it. I'm looking for two things. 

1. Truly passive income

2. More opportunities to purchase inventory.

I remember reading Rich dad poor dad a long time ago the thing that really stuck with me is to be the owner not the worker. If I buy a subway and I have to work there in order to make money. I'm not an owner, I work at Subway. If I have to fix toilets in order for this house to make money. I'm not an owner I'm a handyman. JMO

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31 minutes ago, Cdub100 said:

You guys are right, I just don't want to deal with it. I'm looking for two things. 

1. Truly passive income

2. More opportunities to purchase inventory.

I remember reading Rich dad poor dad a long time ago the thing that really stuck with me is to be the owner not the worker. If I buy a subway and I have to work there in order to make money. I'm not an owner, I work at Subway. If I have to fix toilets in order for this house to make money. I'm not an owner I'm a handyman. JMO

Makes sense.   Especially if you can devote your time to other ventures that earn more money than you pay the property manager.   

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Like others have already said, it boils down to "time is money".  We have used a prop mgmt company for ~5 years now on our second home, worth every penny to me.  They are authorized to spend up to $500 on any repair without even bothering me.  I login to their portal at the end of the year and snag any invoices and pertinent tax info and forward to my accountant, easy peasy.  

Luckily we have great tenants...they just signed another 2 year lease.  Unfortunately last week I found out the well line is leaking and needs to be replaced :cry: (although they are handling it soup to nuts and just sent me the 3 quotes the other day for approval).

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