Do You Own a Rental Property?

I don't own any rental property of my own, but I do manage an apartment complex. I use this resource to get hints when dealing with difficult tenants or to refresh myself on a particular law: http://www.thelpa.com/, it's called the landlord protection agency.
My son has two rentals in Georgia, he's had some good tenants and some bad ones that have really wrecked the place. He is still making money on them tho and has hired a management company to pick up the slack.
As far as rent goes, you do want the monthly mortgage paid so you would to make it meet. You also have to decide whether or not you want the tenant to be responsible for keeping up the landscaping or if you will pay for a gardener. Lots to consider. Good luck.

We have had a rental property for about 10 years. The ONLY reason we make any money on it, is because we do everything ourselves...repairs, advertising and dealing with clients. We do not work with a property management company. The pros to this are that we know exactly what's happening with our rent and clients and we do make some money. THe down side is you can get a call Sunday night at 9p.m. about a leaking water heater and you have to go fix it.

As far as deciding on rent, we researched the other rental properties near ours. We priced ours accordingly. I think ours may be just a bit higher than other rental houses, but ours has a much larger back yard with a sprinkler system. Our house is also just a tad bigger than others.

We don't really advertise at all. We simply put a sign in our yard. We have ALWAYS had new renters lined up before the old tenants were out. Stay away from Craigslist. I love CL, but I have heard HORROR stories about tenants found on CL. Listen to potential clients carefully. You will sometimes be shocked at the things they are willing to admit. Check phone numbers carefully. People try to get sneaky...they will give you their parent's numbers as their last landlord. Or you call to verify employment and quickly learn that you called their best friends. Most counties (at least here) will let you search for names in court cases. It's the best way we have found to find out about evictions.

We have had tenants who were consistently late with rent, but they always paid the late fees. And we had one family that moved and left the house really dirty and full of stuff, but nothing was destroyed or damaged, just needed cleaning. No other horror stories to speak of.

Research the laws in your area very carefully. You want to protect yourself and your investment, but you also need to do right by the tenant. Check with your insurance company. Ours will not allow breeds of dog THEY consider to be vicious. We also had to turn down a wonderful family because they wanted a trampoline and our insurance will not allow it (insurance companies do occasionally check the property and will find out). Have a plan for repairs. We try to fix everything as promptly as possible. Check on your property periodically...I am not saying show up unannounced. Drive by once in a while or find and excuse to come over. Put your eyeballs on things.

My husband and I have been Landlords for about 7 years now and we have 7 properties, 11 rentable units. I will have to say that I hate it!! So many different people to deal with and it seems no matter how far you look into a persons background you end up getting screwed. Not that all my tenants are bad but we have been having issues the last year or so with a couple of places and it's amazing what excuses people come up with these days. My advice to you would be to be careful on who you put into your property. There are a lot of people looking to rent at this time but you really need to be careful who you choose. No matter what, the bank still wants their money.

Rental properties are lots of work... but if you are willing to put the time and effort into them they are a good long term investment.

You do have to know the landlord tenency laws for your area... which tells you what you are responsible for and when you can make the tenent responsible for. Some rules change when you have a single unit property and a multi-unit property.

Remember that if you choose to rent there is a chance you will have to evict... which can open a suite against you as well - we just got out of one of those. She counter our eviction to prolong the time she would be in the house so that she whould have a "free" place to live even longer. The courts did find in our favor and she was evicited & we did get a judgement - but it took nearly 12 months to get her out. Now that is not the norm - but I am letting you know the worst case... so you are aware.

You will be responsible for most of the upkeep of the property since it is yours... anything brakes you have to get it fixed. So, make sure you have funds available to pay for the repairs or to replace what ever brakes.

Thus far we have not been able to find a good tenant... we are still repairing the damage the last one did.

We got our a few years ago with equity we had built in our house. We used the equity to buy a cheap house in our neighborhood & later found out it had city orders on it. We have work at getting the orders off the property - just to have a tenant damage it again. Not all tenants will damage the poperty, but keep in mind that some will & also that regular clean-up must be done between tenants (cleaning of everything, painting, and sometime carpet & fixture replacement).

As to figuring out a good price - look at other rentals in the area. Zillow.com is also somewhere you can look - they now have a rental tab & tells you a basic rental price, but you have the right to charge more or less depending on what you want or what the property is like. We are going ot charge a bit more for ours then the site & neighboring homes due to the fact that even though ours was built in 1918 it now has a 92% hearter (due to tenant damaging the old heater), new water heater again(tenant hit the one we put in in 2009 w/ a sleg-hammer), new windows & doors, new plumbing, new wiring, almost completely re-drywalled (due to tenant putting huge holes in walls), new & redone floors (tenant had pets that ruined them), new deck, fenced in yard, new retaining wall & roof. So, basicly the house was built in 1918, but redone in 2011-2012... now you see why we are still working on it.

I know you are not in Ohio - but these are the rules we must play by in Ohio http://codes.ohio.gov/orc/5321 mid you most of the rules/laws protect the tenant more so then the landlord! You should be able to find your states rules/laws on-line as well.

In time we know we will make up for all the repairs, but for now it is hurting th pocket book... we do have another property waiting to be repaired when we get this one done. We don't just look at them as rentals... we look at them as our "nest egg". We don't have retirement plans, bank accounts or any other investments... houses usually go up in value - someday they will be worth more... but for now we are trying to buy the ugly ducklings in our neighborhood & making them into swans one at a time. But the eviction kinda made us have to put our current project house on hold to get the damaged one running again.

Good luck!

Rental property, especially in a complex where you aren't responsible for exterior maintenance makes it easier. I own several rental properties. It's part of my college fund for m kids. If you get a 30 year mortgage you can pay it off in 17 years just by making one extra payment a year.

I always contact the prior landlord, as well as the current one, since a landlord who is trying to get rid of a bad tenant may not be totally honest. I also like to drop by their place if at all possible or at least look at the inside of their car. People with messy cars usually have messy apartments. I've never had bad tenants in Chicago. Be sure the property you buy is close to public transportation. If it's over 1/2 a mile it will be hard to rent.

I use Craigslist and Domu as well as posting a sign in front. I'm a Realtor, so I just use the mls to figure out the rent. I noticed that Zillow gives rent values, so you should check that out too. Prices and interest rates are at rock bottom. It's a great time to buy!

Yes, I have one. Yes, it has been difficult but I would do it again, and hope to sometime soon.

The IRS has a calculator you put in your zip code and some basic details of the property and it spits out surrounding area rent. Other than that you can do your own research in the neighborhood and call around on other properties that are for rent and see what they are charging, to give you an idea.

We are in the process of doing a major bathroom remodel and a light spruce of the kitchen. We are in between tenets right now so we need all new paint and carpet too. It can be a serious drain on your bank account but I still feel it is worth it in the long run.

Just make sure you do your research and pick a good solid house in a nice neighborhood!

Good Luck!

We rent out our first house (until we can sell it to pay off our 2nd house).
Our first house (it's paid for, no mortgage on it) is 4 hours away from where we currently live so managing it long distance ourselves would be difficult.
A friend of mine is in the real estate business and he is our property manager.
He writes iron clad contracts, sets the rent annually based on what current rates are going for, screens potential renters, and is the person they call should anything need fixing.
He's also done what was needed to evict people who were subletting and not suppose to be there.
I don't know what we'd do without him.

They are too much work. We have them and I wish we didn't. The market turned and made it harder. Even my real estate lady said she'd never do it because it's so much work.

We were landlords for a few years when we had to move for my husbands grad program, but were'nt ready to sell our condo and buy a house yet. So we rented ousrselves a place to live (2 hours away) and found some tenants for the place we owned.

I hated it. I hated finding people move in, dealing with them, and having to hear about the problems in the condo and one tenant in particular was very dramatic and had all kinds of issues. My hubby rushed down there (2 hours) to try to solve a plumbing problem for them once and found that one of their kids had flushed a red rubber ball in the toilet and that was the problem.

I would recommend a property management company!

We toyed with the idea of keeping our condo as a rental but after 3 years of being landlords (just before we would have been eligible to pay capitol gains taxes on the property if we sold it as a rental) we decided forget it. Sold it and haven't looked back.

One thing is, it is hard to hold the line with renters and be a good landlord. Once you get friendly they decide to send you the rent a little late here and there... etc. Also, it is hard to know what they are going to be like until after they move in. I highly reccommend checking references with previous landlords!

We own a rental property kind of by default. We bought a new home 2 years ago and when we couldn't sell the first home, we decided to rent it. It is in the Bridgeport neighborhood of Chicago.

First, I would advise anyone who is renting to use a property management company. Ours takes 9% off the top in fees but it is well worth it. They handle all issues, including renting it and collecting rent. A nice check just shows up in our account every month.

Secondly, talk to a CPA about the tax ramifications of renting. If your revenue exceeds your expenses, you will be required to pay income taxes. If the reverse, then you won't pay tax but you can't deduct those costs either. At least not until you sell the property. This includes property taxes and any mortgage interest you would incur. The govt does not want people using rental properties as tax shelters.

In the end, it is very challenging to earn enough in rent to make it profitable, even in this rental market. We are doing it to get by until we can sell it and get our money out of it. If you decide to proceed, plan to buy a property that you know will appreciate (because you can get it for a steal now) and don't expect to see any real profit til you sell it.

Good luck!

It depends on the tenant you choose. I did my due diligence and still had one that would not pay rent once he was in and we had to go through eviction, and we have some where they treat your property as if they own it themselves. Call their references, Do the credit checks,
I have had more good renters than bad, but when they are dead beats, you really question why you are doing this, Be sure thatt you can make the payment if they don't, or if you end up with it vacant until you find the right tenant ,

We had some rentals, but just sold the last one a couple of years ago...we would look at craigslist to see what other units were going for on the rent. Sometimes we would go a little lower.

A sign in the window is helpful and craigslist is helpful too. Good old fashioned newspapers work to get tenants.

We decided to sell our properties because we think rentals are a little too much work, we made money, but we probably could have done just as well with a good mutual fund or some good stocks after you take into account the expenses on a rental...like property taxes, maintenance fees and regular maintenance on the interior and exterior. The hassle factor is another thing to consider...sometimes the best of tennants don't pay or you get complaints about them from the HOA. Homeowners associations can also be a real pain to deal with.

I think it very much comes down to where the property is located and what kind of rental and/or tenants you intend to have. I rent a vacation property during the summer months in an upscale area and while there can be problems, the tenants tend to be a different caliber from the year-round tenants. I receive all the rent up front, plus security and utility deposits, so I don't have to deal with the issue of late rent. And while I've had some damage in the past, there hasn't been anything overly major. I've learned to put away anything of value, even if it's only sentimental value. Tenants never take care of your property/furniture/appliances the way you do.

I have trusted service people (pool guy, lawn guy, pest-control guy, cleaning service) who report big problems to me.

Weekly rentals can be the most lucrative, but can be a real pain getting the place ready for each new tenant. You really need to trust your cleaning service. I prefer longer-term tenants and use real estate agents to help rent the place out (for a sizable fee). A friend of mine has started using the Home Away site to rent out his place. I'll be curious to see how it goes. Not entirely trusting it yet - I've heard both good and bad experiences.

I did. What a PITA! LOL
Even with a paid-for property--I found this was WAY more trouble than it was worth.
As for renters--we had the good, the bad and the ugly. You never know.
My advice (this is the way we did it) if you can outright purchase a rental property--fine. If you're taking a loan for the mortgage--no way would I do that.Usually, if you think you'll count on that extra monthly income after the payment is made--forget it!

I've had rental property and am trying to sell our last one. I figured renting property would be fairly easy. Everyone needs a place to live don't they. Everyone will pay their rent to keep their place to live. NOT TRUE!!!

I've had stocks that pay dividends, and the dividends are much much more reliable. The stocks can be sold in less than 60 seconds and a stock broker will/can charge you much less than $100.00 to sell $100,000 in stock. A real estate broker MAY or MAY NOT be able to sell your rental property within 30 days and will charge you $6,000 to $10,000 to sell a $100,000 duplex or 4-plex.

I've had many more dishonest renters than honest renters. If I had all the rent money I've been cheated out of over the years, I could fill a treasure chest.

IF you decide to buy rental property, be sure to buy it close enough to where you live to be able to drive to it and do the repairs and cleaning and inspecting yourself. Find plumbers, electricians and drywall installers that will work for reasonable fees. At one time or another you will need them all. If your rental property is far enough away that you have to have a plumber to install/replace a leaky faucett or something similar be prepared to shell out $50 or more. Usually more. I have replaced lots of washers to fix leaky faucets, but when I have to hire a plumber to fix a leaky faucett it almost always needs a complete fixture replacement. Go figure. And when they replace the fixture they never charge you the sale price. (They say they couldn't find one you needed on sale.)

The one good thing about rental property is that you can buy them for 10% down or less. If you buy stock, you have to pay at least 50% of the price up front.

I now get about 16% on my dividend stocks. Measure that against your ROI on a rental property. And my dividend stocks haven't told me they are not going to pay the rent because they needed a new car.

IF you decide to buy rental property, Good luck to you and yours.

I can give you what I look for in a landlord as I have been a renter for the last 12yrs, maybe it will help. I look for a landlord that allows pets firt and foremost, I know that a lot of times it depends on HOA policies but that is our first priority. Secondly, we look for a ground floor unit in a condo (right now we are L. our townhouse) as we have dogs and child. If you are looking to rent to single adults go top floor, looking for family keep it to the ground level. I am looking for reasonable rent for the property size, I compare renting from a person to the pricing of renting from an apartment - they should be comparable. I also like when they have a company that you can call to have things fixed vs waiting for them or their hubby to come fix it, unless they actually know what they are doing. When we have a good location, good rental price, good landloards we tend to stay for a year or two. Infact we would have stayed in one house for 3yrs if the owners did not want to move back into the property. So, I hope that information helps, mostly be flexible on pets (just charge a larger deposit to cover any move out expenses), hire a company to cover repairs so they are done professionally and keep the prices competative for the area. Good Luck!

ETA Even if you go thru a realtor, suggested advertise everywhere.

You can have mine! We paid $185 for our TH in 2004 and if you look on zillow.com it says we are not charging enough rent but we are currently happy with our tenant. My first tenant was a nightmare and after spending $3000 initially to paint and re-carpet 9 months later the house was trashed and I found myself having to redo it all again. Unfortunately we had to suck up 3 months rent in the process. Currently we are upside down and are just waiting for the market to level out. I would avoid rental properties unless you are in a good area.

I do, but we are not good at being landlords. Right now we don't even charge. Ugh. If I were you I'd hire a company tht helps manage your rental property. Takes the headache out of it. Eve rented to 8 different people, not really happy with any of it.

First, forgive my answer if it's all over the place. There's a lot, and I was just writing as I thought of something, not necessarily in the most logical order: We don't have a ton of experience, only 2 tenants, but we've learned a bit. I think A LOT of things depend on WHERE you live, and WHEN the house goes up for rent, just like selling a home. We put our house up for rent the first time 17 months ago, and in 5 days it was taken. We hired a property manager that my husband knew, and I don't really know how he came up with the rent price...I'm guessing he looked around on various sites for houses in our local area and went with the average to low side of average when pricing. The family was a military family, they signed a 12 month lease but the husband was deployed...we let them do month to month after that at no extra cost, there were NO problems at all. They were the perfect tenants, no lie. However, I had plenty of problems with the "manager" (he was a misogynist jerk) and he ended up being fired before the tenants moved away. I hired a realtor I'd met before to collect the keys and do a final walk through with the family as they were moving out, he took pictures and emailed everything over to me and the family got their full deposit back. We live 2 days' drive from the rent house, so we can't do the work ourselves, but I am fortunate enough to have a neighbor who provides lawn care that we like for the basics, and another guy that could do the harder things like trimming the hedges, sprinkler system repair, etc...we also have an awesome lady to take care of our housekeeping in between tenants (she was my housekeeper before we moved, and I trust what she says implicitly). The realtor that took over after we fired the former manager listed the house, provided the background and credit checks (at applicant's expense), and drew up the contract and all the paperwork for the new tenants. He, however, does not provide management services, but a close friend's husband, who is also a realtor, agreed to do so for us on the side. We will keep him, he's doing an excellent job. The new tenants signed a 6 month lease, which is shorter than normal so their insurance company is paying a premium price (more than we were asking). We came up with our asking price but looking at the different websites in our area, but also by factoring in what our mortgage payment is, the taxes, insurance, hoa dues, and cost for the manager and then making sure we make a little money on the side (not much, but enough to keep in it's own bank account and set aside for repairs and maintenance). It is not a paid for investment property, but our family home that we had to leave because my husband had a job transfer. We didn't want to take a loss selling the property for less that it really should go for, so that's how we decided to rent it out. We're not getting rich off of it, but it pays 100% for itself and that's what really matters. Our second tenants: it took 13 days to get them, but they moved in the very same day that the contract was signed. We can rent our house for a good price not only because it's a good house in a great community, but also because of several factors that work together to insure that rent houses are in very high demand in that area. We're blessed in that respect. Our new property manager has done several things himself to help keep our property doing well (caulking, checking to make sure it's being watered properly (not just for the landscaping but also for our foundation), simple things like changing alarm batteries and things like that), and we have only had to have our hvac system inspected (all things good) and the vents cleaned by professionals. That's it.
Our house will be available for move in again on August 5 (tenants moving out by 7/31 and the housecleaner and maintenance are already scheduled to do a run through starting on 8/1). Our manager does a little maintenance things like washing the house, or checking the shrubs, etc once every other month (one project at a time) so that we don't have to do SO much at once but also to keep an eye on things. The family living there now are good, just slightly annoying but really nothing to complain about. We've never had a late payment in nearly 18 months (*knock on wood).
A clear, thorough contract is important though. We've actually kept the contract that the realtor who found the current tenants provided, and we've used it as a template for future contracts with future tenants. We will list the house ourselves from now on because it's a 50% of a full month's rent for someone else to list it. Yipes! It was doable, but that's a large chunk of money for something I can handle myself. I would suggest typing in a search for a rental townhome or condo and the zipcode in question, and the top 5-10 sites that come up, that's where you should look into listing. It will also give you an idea of what price range you're looking at.....I believe to sell or rent, you should know how to shop. Some sites charge, some do not. Will you list yourself or use an agent? Will you manage yourself, or hire a manager? Look into all the expenses (including insurance for a rental property) to determine if it's worth the work, time, and money you'll be investing. For us, it was an easier answer: we had the house, we had to move, we weren't willing to take a $20k loss, the house is paying for itself even if that means I have had to develop a network to get it done and running smoothly.
OH another thing: my manager has maintenance guys he knows and works with. We haven't had to use them, but it is good that they are there. Before moving, I hired a company to paint all of the inside of our house (all rooms, walls, trim, all of it) and they have a free touch ups for life program. We didn't need to get any touchups after our first tenants left, but it's great to know we have that option when needed.