C130 Chief
Mechanical Genius
I would rent it, especially if you can get anywhere close to it's payment. As for a property management company, think twice. And, I can give you the name of a local one to avoid at all cost!!!
Extra House. What would you do with it?
- Thread starter RPM
- Start date
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my5thmopar
Life Long MOPAR Owner
We all have opinions and I don’t have a habit of giving mine to personal issues but, I read the responses and felt I should. Family + money = changed relationship, if you value it then no, no, no, run like the wind as they say. Also, hear that knock...its Murphy wanting to move in. Take your loss now and pay your stupid tax and never get yourself in that situation again. My 2 cents from lessons learned the hard way. Craig
Simple--Rent it and if you need help go to a rental agent but make sure you get to look over any and all applications,We used to have rental property's and I can tell you there is good and bad in doing it,If you take ANY of this to heart listen now--"STILL TAKING APPLICATIONS" is your simple response to anyone who is interested in the rental.We checked with churches for people looking for homes and that was always great renters.I guess we were lucky--Steve
diymirage
HP@idle > hondaHP@redline
I like land contracts
you sell the house but retain the title
laws very in every state so look into your but in short here is how it works, you agree upon a price , lets say 100.000, a time span, lets say 5 years, a monthly payment, lets say 1000 and a percentage of interest ...lets say 5
so, the buyer buys the house for 100.000 dollars and makes 60 payments of 1000 dollars
that means that after 5 years you have received 60000 and now the remainder of the contract is due (the remainder being 100000 plus the compound interest = 127628 minus the 60000 is 67628 dollars)
now here is the kicker...IF the buyer can not come up with the remainder of the balance the 60K he paid over the last 5 years are considered rent and yours to keep (as is the house)
but as far as the state is concerned the buyer is the owner and that means he gets to homestead it (something you can not do with a rental)
which also means that if the furnace goes out you are not responsible to repair/replace it, the buyer is BUT if for whatever reason the deal falls through any improvements made to the property are yours to keep
there are a few benefits to a land contract that only apply to the buyer though, for starters you do not need credit because you don't need to get a mortgage
and if for whatever reason you need to evict the buyer it is a little more complex then evicting tenants
I actually have one piece of property I have a land contract on and I helped my inlaws do the same to one of theirs
you sell the house but retain the title
laws very in every state so look into your but in short here is how it works, you agree upon a price , lets say 100.000, a time span, lets say 5 years, a monthly payment, lets say 1000 and a percentage of interest ...lets say 5
so, the buyer buys the house for 100.000 dollars and makes 60 payments of 1000 dollars
that means that after 5 years you have received 60000 and now the remainder of the contract is due (the remainder being 100000 plus the compound interest = 127628 minus the 60000 is 67628 dollars)
now here is the kicker...IF the buyer can not come up with the remainder of the balance the 60K he paid over the last 5 years are considered rent and yours to keep (as is the house)
but as far as the state is concerned the buyer is the owner and that means he gets to homestead it (something you can not do with a rental)
which also means that if the furnace goes out you are not responsible to repair/replace it, the buyer is BUT if for whatever reason the deal falls through any improvements made to the property are yours to keep
there are a few benefits to a land contract that only apply to the buyer though, for starters you do not need credit because you don't need to get a mortgage
and if for whatever reason you need to evict the buyer it is a little more complex then evicting tenants
I actually have one piece of property I have a land contract on and I helped my inlaws do the same to one of theirs
I'll second not renting to family.
...and add that the previous "HUD" post, is called "section 8" down here, and is only guaranteed rent up to $800 a month. We've had several prospective tenants ask to do that, but we need to get $900, and there's no recourse if you enter into that kind of agreement, and the HUD tenant doesn't pay their $100.
Just a little crash course...
Add all 12 of your payments, plus ins, plus property tax, then add about $1000 for repair and cleaning. Divide that by 12, and that's the ballpark rent to charge before any profit. Check the nearby rental rates for comparable houses (zillow is OK for this). Remember you get depreciation at tax time, and deduct mortgage interest on that property, but loose the local property tax homestead (but that tax is also federally deductible).
Not nearly as bad as it might sound....really.
...and unless you are a TERRIBLE manager, don't pay someone else to do it.
...and add that the previous "HUD" post, is called "section 8" down here, and is only guaranteed rent up to $800 a month. We've had several prospective tenants ask to do that, but we need to get $900, and there's no recourse if you enter into that kind of agreement, and the HUD tenant doesn't pay their $100.
Just a little crash course...
Add all 12 of your payments, plus ins, plus property tax, then add about $1000 for repair and cleaning. Divide that by 12, and that's the ballpark rent to charge before any profit. Check the nearby rental rates for comparable houses (zillow is OK for this). Remember you get depreciation at tax time, and deduct mortgage interest on that property, but loose the local property tax homestead (but that tax is also federally deductible).
Not nearly as bad as it might sound....really.
...and unless you are a TERRIBLE manager, don't pay someone else to do it.
bighammer
Well-Known Member
Something else to consider is "short term" rental, or vacation rental. Depending where you live, that is. In my area, we have literally thousands of vacation rental homes. The advantages to the owner of the property is: often times more rent money per month, the house gets inspected and cleaned between different renters - usually 1-3 days. And since it is a short term rental, there is no issues with having to evict a dead beat renter. On a vacation rental, the renter uses their credit card as a deposit, any damages are deducted from their account.
gunbunny
Well-Known Member
I have owned a rental house for several years now.
I'll share some things I've learned.
1. Never rent to family or friends. That just causes a lot of hard feelings.
2. Never, ever rent to lesbians. Its the same as renting to two nasty guys. (ask me how I know!)
3. Always get a deposit.
4. Make sure all the utilities are in the renters name within 5 days of occupation.
5. When figuring the deposit, pad it for at least 2 months of water bills.
6. Take an inventory and pictures of ALL appliances and fixtures in the home.
7. Don't fall for hardship stories. You got one too, that's why you're renting the house out.
8. Don't let anyone run a business out of the house.
9. Get a lease and make the renters stick to the terms.
10. Make sure there is a late pay clause in the lease as well an eviction clause in the lease.
11. NO PETS!!!!!! Pets will destroy a house.
I've had great luck with renters, I've had a few shitheads too.
I've only been in charge of the house for a few years. But I've close to it since birth. I know every problem the house has had for the past 25 yrs.
I have become the biggest hard *** when it comes to my rental house.
I will never tell you not to rent the home out, but it does come with some headache sometimes. Currently I have a great renter, so life is cool. I have a feeling she'll be there for a few years.
I can tell you horror stories but, why bother.
Having a renter is better than the home sitting empty. I know, I did that for a year and it worried me to death. especially when copper is being stripped out of homes and the house next door got hit.
all the things I listed I learned the hard way, and I have good story as to why I have that rule.
On a side note, I was partners on a 12 unit 3 floor apartment complex. Shortly after I sold out, I learned that one of our problem tenants was evicted. They were on the 3rd floor, the idiot dumped quickcrete down the drains and the toilet. That crap screwed up the drains on the entire west side of the building. my partner cheeped out on the insurance and it cost him a ton. He couldn't prove anything, so he was stuck.
So if you do rent it out, have a sit down with your agent.
I'll share some things I've learned.
1. Never rent to family or friends. That just causes a lot of hard feelings.
2. Never, ever rent to lesbians. Its the same as renting to two nasty guys. (ask me how I know!)
3. Always get a deposit.
4. Make sure all the utilities are in the renters name within 5 days of occupation.
5. When figuring the deposit, pad it for at least 2 months of water bills.
6. Take an inventory and pictures of ALL appliances and fixtures in the home.
7. Don't fall for hardship stories. You got one too, that's why you're renting the house out.
8. Don't let anyone run a business out of the house.
9. Get a lease and make the renters stick to the terms.
10. Make sure there is a late pay clause in the lease as well an eviction clause in the lease.
11. NO PETS!!!!!! Pets will destroy a house.
I've had great luck with renters, I've had a few shitheads too.
I've only been in charge of the house for a few years. But I've close to it since birth. I know every problem the house has had for the past 25 yrs.
I have become the biggest hard *** when it comes to my rental house.
I will never tell you not to rent the home out, but it does come with some headache sometimes. Currently I have a great renter, so life is cool. I have a feeling she'll be there for a few years.
I can tell you horror stories but, why bother.
Having a renter is better than the home sitting empty. I know, I did that for a year and it worried me to death. especially when copper is being stripped out of homes and the house next door got hit.
all the things I listed I learned the hard way, and I have good story as to why I have that rule.
On a side note, I was partners on a 12 unit 3 floor apartment complex. Shortly after I sold out, I learned that one of our problem tenants was evicted. They were on the 3rd floor, the idiot dumped quickcrete down the drains and the toilet. That crap screwed up the drains on the entire west side of the building. my partner cheeped out on the insurance and it cost him a ton. He couldn't prove anything, so he was stuck.
So if you do rent it out, have a sit down with your agent.
Renting is certainly an option IF the bank will allow it. I tried to rent one and the bank said absolutely not, and I get along with the President of the bank very well.
If you do consider renting it might be prudent to check with them to avoid any future grief. When you bought it, it was to live in.
If you do consider renting it might be prudent to check with them to avoid any future grief. When you bought it, it was to live in.
First off, congratulations! Secondly, the way the economy is, I would sell hell out of it and sock the money in the highest yielding account I could find, but NOT in the stock market.
cudavert
DARTAHOLIC
Pfffft.....Ha Ha......can they even DO that by law? What are they gonna do if you DO rent it??......come and take the house? Please do! I'm upside down on it! LOL Y'know, people will act like authority figures only if you let them. It's still your house as long as that payment is sent every month.
diymirage
HP@idle > hondaHP@redline
I wouldn't be so sure
when I did the land contracts on my houses my lawyer asked to see the mortgage papers because some of them add a clause that says if you are no longer the main occupant and you rent it out the remainder of the mortgage becomes due immediately
there wasn't anything about this on my mortgage but I wouldn't put it past them to add a clause along those lines
im pretty sure those guys are whom they based the shrek character rumplestilskin on
O and don't forget the taxes you will pay for selling it.right now its a right off get a good tax man and see,cuz weather you know it or not you are now a businessman and you will have all kinds of right offs just trying to help.....Artie :coffee2:
Oklacarcollecto
Life is an experiment
That might be a good plan but he already posted the owes 15K more on the house than it is worth so instead of socking money away he would have to find 15K to pay it off.
1972DusterPaul
Well-Known Member
Is your wife's house upside down?
Which house will do better in the market in the long run?
Which neighborhood is better to live in?
I think you need to rent it and take the little hit with less rent than a big $15K hit.
Can you refinance the house?
My wife and I just did that on our house and our payment was cut by $400 a month.
We did that just before I lost my job...so it worked out.
We put a ton of money down on our house so we are not upside down, but it sucks knowing it worth less than we paid for it...but then again we need to live somewhere.
Paul
Which house will do better in the market in the long run?
Which neighborhood is better to live in?
I think you need to rent it and take the little hit with less rent than a big $15K hit.
Can you refinance the house?
My wife and I just did that on our house and our payment was cut by $400 a month.
We did that just before I lost my job...so it worked out.
We put a ton of money down on our house so we are not upside down, but it sucks knowing it worth less than we paid for it...but then again we need to live somewhere.
Paul
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