I realize that the vast majority of people on ehre are most likely renters and not yet property owners, but I thought maybe there were a few people with some experience. I am in the unfortunate position of kinda being forced to either take a $30k loss or rent out my house, so I have decided to go with the latter. Kinds of things I am looking for....

1. Did you use a rental agency? Was this a good/bad decision?

2. Any problems/advice?

3. Were you in the area or was this a long-distance rental?

Thanks a bunch!

8/13/2008 2:27:05 AM

there are a few people on here that rent their condo/house out

is your house a good rental property?

how's it laid out / sq. ft / #br/ba / location / rent per mo

1. no - i lived there with friends a few years - then my little bro did - then i had friends that could fill it once i/we moved out - once that pool dried up we sold it

2. be very specific in your lease and get a security deposit

3. in the ncsu area

8/13/2008 9:02:34 AM

given those options, yeah, i'd rent...but man, i can't imagine being comfortable with someone living in the place i've made (in terms of the hardwood floors, the landscaping, etc.)

8/13/2008 9:04:51 AM

Just an FYI regarding taxes (this is not official advice BTW, you'll need to research it)....

If you use a rental agency, they will collect the rent money and all of that stuff for you, which is nice. However, in January you will receive a 1099 for the total amount of the rent collected (Misc. Rental Income). Of course you can still use your write-offs but it can sting bad.

If you collect the money on your own, you can choose to report it or not.

8/13/2008 10:20:52 AM

Quote :

"you can choose to report it or not"

well, yes, that is technically a choice, and while i AM in favor of telling uncle sam to go fork himself, if you're going to use contracts and such, it might be a good idea to just pay the taxes from day one...just in case

8/13/2008 11:01:40 AM

Quote :

"If you use a rental agency, they will collect the rent money and all of that stuff for you, which is nice. However, in January you will receive a 1099 for the total amount of the rent collected (Misc. Rental Income). Of course you can still use your write-offs but it can sting bad. If you collect the money on your own, you can choose to report it risk tax evasion or not."

Considering he can write off his mortgage, the rental company fees, and all maintenance I'd be somewhat surprised if he could show anything more than a nominal taxable income for the next decade anyway. The real benefit is that the house should be going up in value and you have other people paying the mortgage for you.

I think paying taxes on my rental income cost me a whopping $50 last year. Granted it was just one renter and I had plenty of expenses to write off, but still.

[Edited on August 13, 2008 at 11:16 AM. Reason : l]

8/13/2008 11:06:34 AM

Where you moving to Jim?

8/13/2008 11:37:13 AM

^^^^ Do you always advocate felonies?

[Edited on August 13, 2008 at 11:38 AM. Reason : not enough ^s]

8/13/2008 11:38:17 AM

Ehhhhh, I didn't advocate anything, you may want to read it again if you really care

[Edited on August 13, 2008 at 11:47 AM. Reason : f]

8/13/2008 11:43:37 AM

Quote :

"this is not official advice"

Like I said, he can risk it or not. And OMG, I rented my house for a year to a colleague and he gave me a check on the first of every month. If you are so interested PM me and I'll send you my contact info. so you can report me.

8/13/2008 11:46:20 AM

Don't double post.

8/13/2008 11:52:20 AM

Thank you for the advice, you can see I edited the first.

I appreciate your help!

8/13/2008 11:54:14 AM

1.don't rent to friends
2. don't become friends with the renter.
3. don't be mr nice guy. if they are late, pressure them, threaten to evict them. if they break the lease or mess up anything keep their deposit
4. make sure you collect 2months rent before they move in. that way you are always a month ahead and if they don't pay a month you can evict them after 30 days and still be paid up to date.
5. rental services will just rip you off and take your moeny, do it yourself IF YOU CAN
6.this is better than selling (if you can afford to leave your money tied in) because like someone said, you will only build equity while the value goes up your p will be going down and its like free money even if you broke even on costs. Any profit you make on the rent is just gravy. (Assuming nc doesn't collapse like everywhere else which is sort of possible)

8/13/2008 12:16:28 PM

Thanks for the advice. To answer a few questions asked....

David, I am moving from the Seattle area to New York. So still too far to come take your money at poker (again).

The prospective renters seem like good people. He's an officer in the Navy, his wife is a stay at home mom, and they have two young daughters. They have good references from prior landlords. I have never actually met these people and the way it seems to be working out, I may never meet them face to face. From the emails they sent, I really feel like they'll be good tennants.

As for the having other people pay the mortgage, that is exactly what I was thinking. What I am charging does not fully cover the mortgage, as I will still have to throw in about $600 extra a month, but most of that $600 is principle. I am fine with shelling out that kind of money and waiting to see what the housing market decides it's going to do in 3 years.

And yes, the property is really nice.

8/13/2008 8:44:11 PM

When you rent, add a clause to the renting agreement that allows you to remove the front door if they don't pay the rent for two months, or if you pay utilities, you can specified that they will be turned off, etc.

8/13/2008 10:04:19 PM

I always thought landlords charged enough to cover the mortgage plus some profit....can you be my new landlord please?

8/14/2008 12:22:50 AM

^^hahaha, just cause its in the contract doesn't make it legal

^yes, but not always in the current housing market

8/14/2008 12:36:24 AM

1 & 2. I ran the rental myself for about 18 months. It's not that hard once you find tenants. My best advice is to either be a good handyman or know someone who can get there in short notice to fix stuff and cut you a deal. A friend who runs a property management company offered to manage for free, so thats what I do now. If you're moving across the country I would go with a property manager.

3. It was a few miles from my residence, but I made it part of my drive home from work and drove past a few times a week.

If you rent to college students you're generally better off renting to girls than guys. Girls have their nesting instinct and decorate a place and make it feel homey. Guys party and trash houses. Not always true, but in my experience its generally the rule.

Non-refundable pet deposits and those kinds of things are great. Honestly, I don't really make any money on either of the houses that I rent. I bought my oldest one three years ago and have since built $8000 in equity and the new tax value (which pretty much dictates price in that neighborhood) is $63k more than I paid for it.

Also the continuing increase in the cost of living means that rent will go up as well in most communities. The property that I mentioned before initially rented for $1000/month and I had a hard time renting it the first time. The last time that I put a sign in the yard I had 50+ calls about it and had a signed lease the next day for $1400/month. If you have a good rate on your mortgage you should definitely be thinking of it as a long term investment.

8/14/2008 12:46:06 AM