WWYD--Sell or try to rent house?

[jedijill]

I have a house that I've tried to sell since 6/08. I moved to Colorado to take a new position and the house sat empty while I had it on the market until my Realtor found a family last August who needed a place to rent until their house was built. Fast forward to today and they will be moving out in the next couple of months and I need to make a decision on whether to relist the house or just ride the market out another year by finding a renter.

My current feeling is to find another renter but I am worried about getting a deadbeat in the house that will either not pay or tear the place up. I would love just to get out from under the house but I'm at the edge of being underwater (last listing price was within 5K of paying off the mortgage and realtor fees).

My home is only 5 years old and in great shape. I put in laminate floors and new carpeting before I moved. Yard is landscaped and fenced. The thing that is killing me is that it is only a 2 bedroom. House is located in a suburb of Kansas City, MO. House 2 doors down was just listed at 129K which was the asking price when I pulled mine off the market.

My question is what would you do? I can pay the mortgage out of my pocket but basically it eats up all my "extra" money every month. I really don't want to go another year making the payments out of my pocket again. How do I go about trying to find good renters when I'm 700 miles away? My folks live in the area but pretty much made it clear that they don't want to do any of the legwork for me.

Any ideas or advice?

Jill in CO

 

[SandrA9810]

Sometimes you just have to go with your gut instinct on people. Apparently I have a good one for that... but that's neither here nor there.

Do you know of any one that's going to Kansas?? maybe you can market the house from where you are to some one going out that way, then you can meet them in person.

And is the rent pulling in enough to cover the morgage?? And if you can make the rent enough to cover that and then some, i'd stick with the renting. And hopefully you won't loose anything on the house when the market does turn around.

 

[TxRabbit]

Today's market is a rough buyer's market. Rough for sellers. LOL. Your house may compare less favorably with the other one that just listed in that is WAS a rental for the past period of time. Think about what you would be like if you were a buyer. Odds are that even if they were nice to your house and took care of it, it suffered some wear and tear over the time they were there. Stuff happens. Movers knick walls. These days buyers are demanding. They know what the market is like.

If you are seriously wanting to get out from the house, then list it for less than the other house. The fact is that a house will generally sell for whatever the market will bear. If you underlist it, then the buyers will go frantic, worried that it will get away and they will make a full price offer. They hear about the other two couples interested and they go above the listing price. Talk to Realtors, what I say is true. Real estate has been are family business for a long time.

I don't know what the payment is but you have to calculate how many times you can make that payment with no renter's in the house. That would be the amount of money that you technically could afford to pay at closing in terms of a loss. If you really want to get out from under the house. Calculate this number. List the house for a PRICED TO SELL that targets this potential loss and see what happens. It's possible that the house sells within this range. You can have it listed for both sale and lease and just see what happens.

 

[sweetpeakaris]

I would rent it. Homes are for sell right now way under market value, well at least here in Mi. I would find reliable renters and try to sell later. Why continue to pay the mortage and have it sit on the market? Let someone else pay the mortage by offering it for rent, this way you can save your money.

 

[OceanAnnie]

I would rent it. It's a tough sellers market.

We had a rental for 3 years (a good while ago) and sold it after without any problems. We handled all the rental stuff ourselves, interviews (definitely follow through with references), contract, any problems. The distance is a huge issue. I'd hire a real estate company to manage it.

 

[tlh0726]

The key here as you stated is finding someone that will take care of the place and pay the rent. If they do not pay the rent, are you prepared to have to file paperwork for evictions, go to court, etc. ? Can you handle paying the mortgage and other expenses without the rent money coming in?

In our area, some of the real estate office will manage the property for you for a fee, however this is still no guarantee as to what type of tenants you end up with.

The tenants from 5 years ago are totally different than the tenants of today. We normally had problems with the young ones, now it is the middle age and older that are giving us the problems. Peoples morals and work ethic have changed drastically.

Good luck!

 

[fletchers5]

We were basically in the same situation that you are in. We moved to a different state and because of the economy we decided to rent our house rather than try and sell it. We were in the situation that we couldn't afford to let the house sit.

We had a renter that paid on time for 3 years. Then she got hurt at work, hadn't paid rent for 3 months. We ended up having to evict her. We had to go back and forth from Illinois to PA to do this. Well she TRASHED our house in the tune of $6000.00 damage. Basically the woman has nothing so we got NOTHING... In order to continue with her in court it would have cost us $3000.00......we didn't pursue because again the woman has nothing...so we got no rent for 3 months and had to fix the house back up.

We now have renters in there that at least are paying the rent and keeping the place nice.

There are benefits to having a home that you rent out......TAX DEDUCTION

Since we don't have a lot of deductions now that are children are all grown up....that rental house has really helped us.

It is a pain trying to find someone that pays the rent and keeps the place nice. Just make sure to get 1st,last and a security deposit.

If someone is late on a payment let them know that you will evict if they don't pay by a certain date. The longer you wait the longer it takes to get them out of there. Our lease states that if the rent is not paid within 5 days of the due date we can start the eviction process. Don't let them tell you
" we will pay next week" because that is one more week it takes to get them out.

 

[SandrA9810]

older people seem to take their anger out more on th rentals these days than just annoying kids. Once they loose their job, and they have no money, they have nothing else to loose and don't care cause they don't own the place. Or when people get forclosed on, they leave the house a mess for the banks to clean up.

just find some one with a very steady job history, and good refrences. There's a ton of people that could really use a nice rental.
I also saw this on a show, like tlc or something. But people would rent their house to stagers. Some one that doesn't mind moving on short notices, and they provide the furniture and such to keep the house more alive. So that way when an agent shows it, it doesn't look deserted.
Once you sell, the stager moves out. And that way you're not letting it just sit there, and you're getting some money for it.

 

[jedijill]

Sorry for the delay in responding but I just got home from work.

Thanks for all your replies. I emailed a couple of property management companies that I found online for information on their services. I'm keeping my options open but wish I could get rid of the house sooner than later. Hopefully the housing market will pick up sooner than later.

Jill in CO

 

[dogodisney]

Not sure if this has been mentioned since I just skimmed the other posts, but have you thought of doing a lease purchase?

 

[jedijill]

Not sure if this has been mentioned since I just skimmed the other posts, but have you thought of doing a lease purchase?

How does that work? I'm open to anything!

Jill in CO

 

[robinb]

Hmmm ... I have no proof, but I think the market is turning around. I have heard of a couple of homes that have recently sold that had been on the market for a while. Maybe they lowered their price or maybe the market is on an upturn.

If you are worried about your house losing curb appeal because it was a rental, the last thing you will want to do it rent it again. It's only been a rental for 6 months so it can't be in too bad of condition. If you re-rent it again you will have it as a rental for another year. That may be enough to stigmatize the house as a "rental property" and you will get less than you want for it.

What does your Realtor say? Do they think they can sell for enough to cover your mortgage? Spring is a good time to sell.

 

[tlh0726]

If someone is late on a payment let them know that you will evict if they don't pay by a certain date. The longer you wait the longer it takes to get them out of there. Our lease states that if the rent is not paid within 5 days of the due date we can start the eviction process. Don't let them tell you
" we will pay next week" because that is one more week it takes to get them out.

The whole eviction process is not geared toward the landlord, it is your property but you cannot do anything to the people that are refusing to pay the rent or leave until the court forces them out. And then if they leave anything behind, you the landlord need to notify them that they have 30 days to get them or they will be disposed of. You are responsible to keep their crap, safe and secure or they can come back and make you pay for whatever is missing, broken, damaged, etc.

One more thing to check out, one place that we had a rental, the tenant paid the utilities. If the tenant did not pay the water/sewer bill, the borough would come after us the property owner for the money that is owed.
All utilities are currently included in our rentals, we got tired of having the tenants call us in the middle of the night because they had no heat, lights aren't working etc. Well duh!! what do you expect when you did not pay your bill for how many months.

Being a landlord is not all that it is cracked up to be.

 

[Blue.Fairy2]

Eviction laws vary from state to state as do all landlord laws check with your state.

I am not sure I would want to rent if I lived in another state from my rental property. Property management companies usually charge way to much for what they do in my opinion and if you are just making the mortgage then you will be paying out of pocket each month.

I would look into the rent to own option that dogodisney suggested, where a portion of the rent goes toward the purchase of the home. That way at least the renter takes some pride in the home because they are wanting to make it their own.

We have had a renter for the last 5 years and this week end she told my husband she is moving out of town in the summer. I am dreading this. She has been a good tentant paying on time and not much of a headache. I am worried that the next tenant will not be as good.

Posts like the tenant that caused $6000 damage scared the crap out of me. I mean what did she do that caused $6000 in damage!!!!?????

 

[TxRabbit]

How does that work? I'm open to anything!

Jill in CO

These can vary based on the agreement that you sign with the prospective owners/tenants. These are generally done when a buyer has the intent to purchase the property but some lack prevents immediate purchase, could be savings, could be credit, could be a job change, whatever.

The advantage for the buyer is the flexibility to close in the future and have a chance to deal with whatever they need to deal with while getting control of the property they really want. The advantage for the seller is that the buyer (the future owner of the property) becomes immediately responsible for all maintenance and repair on the property.

Generally, the buyer will give the seller a % of the purchase price as a purchase deposit, around 3% give or take. This is nonrefundable in the event the buyer doesn't follow through on contract. The seller is required to present this money at closing as part of the buyer's down payment. A portion of rent is also considered to be in the favor of the buyer, which the seller will also bring to closing for buyer's down payment. In this case, rent may be higher than typical market values.

The seller gets the benefit of having help to pay the mortgage, relief from repairs/maintenance costs, and the feeling that the house is taken care of, provided that the buyer follows through on the contract.

In this market, buyer's may be more willing to do this. They have an out, with a loss of deposit, in the event that income may change, but they can also take advantage of today's lower prices since the purchase price is generally set by today's market values. Seller's may be more willing to do this in today's market because the competition to sell in high.

 

[3boymthr]

Eviction laws vary from state to state as do all landlord laws check with your state.

I am not sure I would want to rent if I lived in another state from my rental property. Property management companies usually charge way to much for what they do in my opinion and if you are just making the mortgage then you will be paying out of pocket each month.

I would look into the rent to own option that dogodisney suggested, where a portion of the rent goes toward the purchase of the home. That way at least the renter takes some pride in the home because they are wanting to make it their own.

We have had a renter for the last 5 years and this week end she told my husband she is moving out of town in the summer. I am dreading this. She has been a good tentant paying on time and not much of a headache. I am worried that the next tenant will not be as good.

Posts like the tenant that caused $6000 damage scared the crap out of me. I mean what did she do that caused $6000 in damage!!!!?????

It really wouldn't take that much.

I am a renter and we a responsible for all maintenance on the house, except major items like a new roof or new septic system (it's a strange deal but I pay way way less than market value in rent - I've had the same rent for 20 years - so I can't complain). We need to replace the kitchen floor tile. The cost is somewhere in the neighborhood of $2,000. The shower door needs to be replaced to and a new one is going to run us around $600. And this is just normal wear and tear not "damage."

 

[fletchers5]

Bluefairy2

The $6000.00 in damages were the following:

Replace the carpet in the whole house......one bedroom was used as a kenned..dog doodoo all over the floor....holes in carpet....stains that would not come out.

All Screens on every window needed replaced...there where holes in every screen

Front screen door was damaged....had to replace

Garage door was damaged...had to replace

4 inside doors...to bedrooms had holes in them...as though someone punched them

ceramic tile in kitchen was damaged

kitchen countertop corner was damaged...don't even ask how that was damaged

Walls had holes all over the place

swimming pool filter and pump was damaged....


The worst part of all the $6000.00 is work that WE did all the work.....we had to drive 8 hours and take time off work to do the work ourselves.



This was my home and you should have seen it when they left...I cried for days.


You are exactly right that the laws are NOT for the landlord. Thank god that PA eviction laws got her out of my house...from the time we went to the district justice to the constable removing her...was 45 days. I have heard of horror stories that it takes MONTHS...

With the new tenants...since they have moved in 6 months ago they have not paid rent on time once. I do get it but it is usually the middle of the month. Now the wife kicked the husband out early January. She took him to court and the juge gave the husband till Jauary 21st to pay January's rent. WTH.....I have a mortgage to pay....the judge did say that all the other months the rent has to be paid by the 1st of the month or he is in contempt of court. Well it is the 2nd and NO rent....LOL..it is an ongoing battle. At least right now these people are keeping my place nice.

 

[Daisy'sMama]

Hi Jill
I live in Independence, MO and I have 2 rental houses. 1 because I got married and my house was too small for a family, the other we rented out when we moved overseas for a year. It has never seemed like a good market to sell them, so we keep renting. Even when we have ahd trouble with a renter, it has served as a good tax deduction. The rents have always at least covered the mortgage and a little extra. You might try contacting "Town Square Property Management" in Independence. They are very reputable and reasonable. Also, try rent-to-own or contract for deed. Talk to a lawyer or accountant for more info. Good Luck,
Stephanie

 

[jedijill]

Hi Jill
I live in Independence, MO and I have 2 rental houses. 1 because I got married and my house was too small for a family, the other we rented out when we moved overseas for a year. It has never seemed like a good market to sell them, so we keep renting. Even when we have ahd trouble with a renter, it has served as a good tax deduction. The rents have always at least covered the mortgage and a little extra. You might try contacting "Town Square Property Management" in Independence. They are very reputable and reasonable. Also, try rent-to-own or contract for deed. Talk to a lawyer or accountant for more info. Good Luck,
Stephanie

Thanks Stephanie! My house is in Raymore so I will reach out to them for sure.

Jill in CO

 

[DebMcDonald]

Try to sell. I own a house in another state only 2 hours from where we currently live, and it's been an awful experience. We had been unable to sell for extended family reasons and we've had some good tenants, but most have just been OK or down right bad. Because it's a house, they are responsible for yard work etc, and no one really treats the house like it's their own. I find the house extremly dirty after someone moves out, (soda spilled up a wall, etc. and then there's the expense of cleaning, replacing, repainting, etc. For us being two hours away we can do most of it, but for you being 700 miles away would incur additional expenses for having someone do it. We've also been screwed on rent, been sued, I could go on and on, but the thought would just depress me more.

If you can get rid of it I would highly recommend it.