Becoming a landlord

[naomi78155]

So, we are about to purchase a new home and keep our current home as a rental property.

Is it difficult to be a landlord? The thing is that my DH works away often, so I would be on my own for the most part. We are about to have baby #3 and while I can manage a lot on my own, I am not sure I am cut out to be a landlord.

The other option is a rental management company. We have only talked to one so far and they charge 12% of the monthly rent. That sounds really high to me. Does anyone have any input on this?

Thanks!

 

[stm61]

depends on your renters and what state you live in. When I lived in NJ, I had renters that didn't pay rent for over a year, and yes, I had references before I let them move in! The laws in NJ totally favor the renters, it took that long to evict them, and then I had to fix everything that was damaged. I would go with a realtor if I ever wanted to rent something again.

 

[PBader]

We have owned 3 rental single family homes for about 12 years. 1 is rented to a long term tenant that we don't have any problems with just the occasional repair. The other 2 are currently for sale. 1 has been empty for 18 months and the other about 9. I got sick and tired of hearing excuses about why they didn't have rent $$. Shoot we all have bills and problems at some point. When the leases were up, I just didn't renew them.

 

[2binak]

Friends of ours moved out of state a few years ago and DH agreed to mow the lawn while their house was on the market. Well, mowing season turned into snowblowing season and then they decided to rent their house since they weren't getting any offers on it. DH agreed to continue mowing & snowblowing for them. He also interviewed & showed the house to potential tenants. Someone finally rented the house & then six months later, they decided to move to a warmer climate so there's DH interviewing & showing the house again. New tenants moved in and a couple of months later they called DH at 11pm to say that they had no heat - turns out that they didn't call to order oil (and yes, it was stated in the lease that it was their responsibility). There were other things that they would call DH about and even though they were little things, the calls got very annoying since they were things that they should have been calling our friends about but they called DH since we are just a few blocks away.

We were both working full-time, we had a brand new baby and DH was doing all of that work at our friends' house & at our house too. After a year & a 1/2, I put a stop to it. It was just too time consuming. Our friends now pay a lawncare service & a plow service to take care of their house and we think it's the best money they ever spent

It sounds like you've got your hands full. What would you be expected to do around the rental house? You may find paying someone else to look after it, a much better way to go. It may depend on the tenant and how needy they are though. DH had no idea how needy these tenants would be until after they moved in. Oh yeah, and now they are 3 months behind on rent payments because their checks keep bouncing

Even before this experience, I knew that I didn't have what it takes to be a landlord, but now I know that for sure! If your gut is telling you're not cut out for it either, then either hire a property mgmt company or don't rent the house.

 

[bettymae1121]

I don't know if 12% is good or bad price for a management company, but I know I personally wouldn't want to have to deal with the tennants. I'd call around for more quotes and then I'd make sure the management company will take care of all the things I want it to (screen/background check the tennants, collect the rent, help the tennants with issues that crop up at the house, etc.), but I personally would pay the money not to have to do those things.

A lot of people will tell you horror stories about being a land lord and tell you not to do it. And I'm sure all of those stories are true, but it's not always that bad. My dad managed a few rentals for a friend of his that lived out of state, and he generally didn't have much trouble with the renters. And my DH's grandma also owned a bunch of rental properties and also didn't have too many problems over the years. People have done it and had decent experiances with it.

 

[tlh0726]

Being a landlord STINKS!!

Tenants have more rights that the people that actually own the property.

You will be running there to fix every little thing and usually it is in the middle of the night because they didn't get around to calling you when they noticed it earlier in the day.

Tenants have the money to go on vacation, go partying every weekend, buy a new vehicle but when the 1st of the month comes they just can't pay you.

Having to paint an entire house between tenants when it was just painted 6 months prior.

It gets real old real fast. People think wow you got XXX dollars coming in each month but don't take into consideration what it actually costs to maintain the property, pay taxes, insurance, repairs, no rent months, fees, the amount of time it takes away from your family etc.

If you are going to do this, make sure that you can pay all the bills for both homes without relying on rental income, because you are not guaranteed to receive it.

 

[luvmarypoppins]

We HATE being ladlords. We inherited dh dads and grandmas house. We live in NY and the houses are in NJ.

Our "good" tenant once didnt pay the water bill so the town put a lien on the house.

The other tenant never paid the rent on time etc. As another poster said, the laws in NJ are for the tenant. Our lawyer suggested us paying them off to move out since the judge might favor the tenant and our lawyer charges like $300 an hour to go to court. We ended up paying them off to get them out.

We still have to do repairs, lawn service for one house, insurance, oil tank insurance etc.

Just because you have a lease, doesnt meanthe tenants will abide by it. As the other poster said too, dont count on the rent and look at your budget etc.

 

[rvchat]

12% of the annual, the monthly or ? and what do you get for 12%?

ok to pm me, we have 2 rental properties @ the moment.....

So, we are about to purchase a new home and keep our current home as a rental property.

Is it difficult to be a landlord? The thing is that my DH works away often, so I would be on my own for the most part. We are about to have baby #3 and while I can manage a lot on my own, I am not sure I am cut out to be a landlord.

The other option is a rental management company. We have only talked to one so far and they charge 12% of the monthly rent. That sounds really high to me. Does anyone have any input on this?

Thanks!

 

[ceecee]

So much depends on the renter. My mom has had people that trashes the place, left unpaid water bills, months of rent owed, left a kitten and lots of junk, etc. She had one lady ask her to put a deck and a back door on the back of the house. One wanted a shed, ceiling fans in every room and wanted her to pay for the tulip bulbs she planted. I wouldn't want to do it! Seems like things are harder now than before. She and my dad had several renter units for 30 + years with seldom a problem, but lately the nuts have come out.

 

[NeverlandClub23]

My boyfriend owns a few properties he rents out. It is such a hassle but it does provide him a nice side income (as long as they are actually paying; so it's not a reliable income). He has the worst tenants right now in one of his properties. They call almost every night about something. Last night it was that the toilet has warm water in it .

One of his townhomes is becoming vacant in a few weeks so we'll be over there all weekend painting and ripping up carpet. Dogs weren't allowed but from the look of the place it looks like they had an animal shelter going on in there.

 

[cydswipe]

I wouldn't want to do it. No way in God's green earth could you pay me enough to be a landlord. Now, my parents have done this for over 30 years. They pay someone to manage the places as they are 5 hours away.

We're talking nightmare situations...
Kids playing w/ matches burnt house down... They were not high quality, welfare sucking tenants. Claimed there were no smoke detectors... Parents have 30 units over 30 years.. .they know the ins and outs.

Completely TRASHING the property. Cops needing to help evict people after they lived for free for 6 months. Copper pipes stolen from furnace for drug money. A woman lived in one apartment and claimed after 2 weeks, her baby had lead poisioning.

Hey, maybe your area won't have the low life people trashing up the place. Be sure to research ALOT the legalities. Be ready for headaches!

 

[naomi78155]

OP here. Thanks for the feedback. DH and I both think the best option is to hire a company to handle it. The only quote we have so far is 12% of the monthly rental. We will call around. We live in Texas and the particular town we live in is a hot rental market right now.

 

[jen22984]

I dont think 12% is that much. We currently have 2 rental properties, one through a real estate agent and the other is not. Our agent takes 10% of our monthly rental income on the house that is under them. Make sure you can afford all of the fees that come about during the first 1-2 months of renting through a rental company too. With all of the fees we got about 15% of the rent the first month and about 50% the 2nd month because of all of the fees.

 

[timmac]

The other option is a rental management company. We have only talked to one so far and they charge 12% of the monthly rent. That sounds really high to me. Does anyone have any input on this?

I'm going to offer this from the perspective of a renter who has rented for about ten years now. 12% sounds very reasonable... dirt cheap, even.

At a glance, I'm getting the sense you haven't looked much into being a landlord, what's involved with it, what responsibilities and costs might be part of that, etc.

I'm kind of assuming your rental management company will take care of searching prospective renters, showing them on tours, taking applications, and once you have a tenant accepted, then being the "front end" for all interactions. That includes the simplest things like collecting the rent check, to fielding any phone calls with potential issues that come up. The other big thing you'll get is that a rental management company is well experienced in the ins and outs of the legalities, and all that fun stuff... writing up a lease agreement that protects both parties properly, handling of any problems that may arise.

Coming again from the position of the renter, I can say I'm very happy to rent (and I'm not keen on buying anytime soon, much to DGF's dismay)... I have a single fixed housing cost each month, and have to bear very little of the responsibility for the property beyond basic cleanliness, etc. Landlords have a lot of responsibility for the money they make.