Renting Out a House
Is this a good idea?
The market blows right now and my house is not selling for one reason or another. Which is strange because, with the program we go through, any person that looks at our house must provide feedback via email, and all of them say that the house is very reasonably priced, is in a nice neighborhood and is very well maintained on the inside and outside. It's immaculate but it just won't sell.
So me and the crazy are thinking about renting it to a family (or whoever wants it really,) for something like a one year lease until the market starts to go up again and we can relist and hopefully make a profit instead of just hoping for breaking even at this point.
Is this a good idea? Is it as straightforward as this or is there a bunch of fine print garbage I need to worry about?
I took you guys' advice and made moves to get the hell out of here at any cost. As of right now, September 1st I'm going to be moving out, but this will cause me to pay to live at one place, while still paying half of my own mortgage which will be quite a burden. So if we can get someone to pay our mortgage FOR US, it will really help us out.
So is this smart, or are we making lianotherli huge mistake?
Please advise away, I actually take the advice you guys give me. it's generally really helpful, so thanks in advance.
It is not a bad idea as long as you know what you're doing. There are two things that you HAVE to do first.
First, some states require you to get certified to do something like this. I know my father is a member of some LandLords association thing or something. He does credit checks and criminal background checks (don't know if the membership allows you to do that stuff for free or if that stuff is just required).
you need to write up a solid lease and have a lawyer look over it. This is probably the most important thing that you could do because you do not want to be liable for anything that your tenants might do.
Just a couple things off the top of my head for ya. I think that the first thing you could do is look online for the guidelines for renting in your state. Then go from there.
Hope that helps! )
Great advice given, I would also check into insurance and make sure your renters have insurance proof also.
Good Luck Travis. )
Those are both good comments above. I used to do property management to for several years, and being a landlord is a HUGE headache. I would suggest calling several management companies to see what kind of deal you can get to let them manage it. You can specify what kind of renters you want in the house (i.e. credit scores, income) and not have to do any of the interviews. Just a thought. even if you don't go with a management co, they will answer all the questions you may have. Also try to make sure that you are making at least $200, maybe even $300 per month more than your mortgage payment to keep in the bank for repairs and incidentals (it seems like everything starts to break when new people move into the house).
anyway hope that helps, good luck
Try that LegalZoom.com website for your documents, I've never used it before but I see it advertised on TV all the time.
I wouldn't be so sure the market will go up in a year.
It's never a bad idea to keep real estate and rent it out. It's your equity right? Make sure rent payments cover your morgage payments. Infact, you may want to remorgage it to the max, take the surpluss cash and put that towards the downpayment or morgage on your new house. You keep doing that every couple of years and your house will be paid off very quickly. Who cares if you never get the morgage on the rental paid off? The bank doesn't. They are making money on the interest. Worst case scenerio, sell it...
cool, thanks guys, I took ZR's advice and signed up for a class, it's like three classes, three hours a piece or some crap and when we get to that point, i'm definitely going to look at legalzoom, so thank for that idea.....
I never even thought to remortgage either. I know rates are lower than when I bought my house, so i could probably save some money every month. ha, this is why I post this shit, you guys come up with things i never would have thought of D
+K to you guys
Remember, if you do re-mortgage, get it for the FULL value of the house. Then take your overage and put it towards the mortgage of your new house.
[quote73f348ba05="Twon"]Remember, if you do re-mortgage, get it for the FULL value of the house. Then take your overage and put it towards the mortgage of your new house.[/quote73f348ba05]
exactly. my new tentative plan is to refinance and get my mortgage down to the $750 range, down from $1100. My roommate works at a bank and she says this is most likely where we end up at.
I want to charge whoever we get in $1,000 a month, with the extra $250 split two ways between Nikki and I, with my $125/month going into a separate account. After awhile I want to use that to either renovate my house and sell it at a profit, or use it as a down payment on my next house which I may also rent out.
I guess it's good that I'm young and I can mess around with this bullshit. I just found a place to live starting in september that's only costing me $400 including utilities. This way I could be saving bank by living there, while having someone else pay my mortgage for me while still putting a little away from that a month. we'll see what happens though, a lot needs to go through for this to work out like that, but we're both pretty motivated, and reasonably intelligent, (her mental state aside, her business savvy is really competent.) so wish me luck haha
wannnnnt house. Unfortunately the average house price here is over $900,000
that's pretty cheap
Years ago we were trying to sell a house. It just wasn't moving, so we rented it out. We had a legal and binding agreement with the renters. We ran in to some really bad snags though. It was stated no pets, yet they had a cat that pissed all over the carpet. It was stated no modifications to landscaping, yet they chopped out all the flower beds. It was stated no smoking in the house, yet we had to clean and repaint as they were heavy smokers....
Just make sure that if you need to have a legal and binding agreement, that everything is stated very clearly so you have a leg to stand on if things go bad.
Also, insist that any renter provides their own insurance and you provide insurance for the structure.
I've probably forgotten some of the things that we learned.....
[quote6e2993d26f="JennyWren"]wannnnnt house. Unfortunately the average house price here is over $900,000
Move in with me. I'll sign half over to you. wink
DON'T do this on your own. Hire a management company - it's the best money you'll ever spend, if you've never done something like this before. The management company (typically a realtor) will vet applicants, and perform background checks for you. In addition, the can provide a lease that's already been reviewed, and is standard for the area.
[quote42645e2ee7="doylnea"]DON'T do this on your own. Hire a management company - it's the best money you'll ever spend, if you've never done something like this before. The management company (typically a realtor) will vet applicants, and perform background checks for you. In addition, the can provide a lease that's already been reviewed, and is standard for the area.[/quote42645e2ee7]
will the class teach me how to do this stuff, or is this something that should be in addition to the class. and is this something most realtors do? I mean, I love my realtor right now and would love to keep her if we went this route.
God may be smiling down on me. (No pun intended with 2012 discussion lol)
Nikki said she's found some roommates and if the bank will allow this, she's going to claim the rent as income and take my name off the mortgage. I don't know that they'll do this for us, but she did work at the bank through which we got the mortgage and they might be able to help us out.
If this works, I could potentially have my hands washed of this nightmare mistake of a lesson learned by the end of the month.
If someone could cross some fingers for me or possibly waste your 1111 wish, I will gladly buy you a beer if this pans out.
Dude that would be AWESOME!
I hope all works out well for you trav, you deserve it.
What do you think you'll do next?
Well as it turns out, my stepbrother and his three friends are going to be renting out a house not too far from me, and they just so happen to need a fifth starting on the first of September. So I was planning on moving in with them, paying the rent there and still fronting my half of the mortgage here.
I swear to god, it is worth financial dire straits to get out of this situation because I am right on the brink of my mental breaking point with this broad. So if this pans out, it would be nothing short of perfect. I lost my investment, but to get out, it's 100% worth it at this point.
Thanks ZR, +K for the sentiment ;)
) + K for being a sweetheart
So if you got out of this mortgage, why would you still have to pay your half? Wouldn't her new roomies help pay it?