TTMA owning a rental property

[piratecat]

We listed our old house to rent and have a bunch of applicants. Do you have any advice on choosing tenants, owning a rental, etc. etc.? 

[jamboree]

Is there a possibility of using a property manager? We lived overseas for a few years and the PM found the tenants, accepted rent payments, and transferred the balance to us. She handled the scheduling service calls but we paid tradespeople directly.She was careful about who she rented to bc she was the contact and we didn’t have to worry about checking references etc.

[joy]

We rent out old house ourselves.

Run a background check and a credit check on applicants. That will weed out some possibilities. Pick a tenant who seems like they like the place and have a long term reason to be around. They will love your home and continue to rent!

[hugsfordrugs]

I had my realtor list and find me a renter. She did the credit checks and had the initial conversations with the renter. I think I paid her one months rent.

[Bluebird]

MH and I have had two rentals in the past that we self-managed. When you have good tenants, it's good. When you have bad tenants, it is extremely stressful. Here are some of my thoughts:

1. Highly recommend using TransUnion SmartMove to screen applicants for background & credit checks. Use the Pro version for $45 to get the full reporting and insights. Don't rent to applicants if it will be a stretch for them to afford the rent.
2. My biggest regret is using the standard lease form in our state, because it lacked clarity on certain things, and it did not have enough protection for us when tenants broke their leases. (This happened to us twice, and we basically just had to let them walk away and still return deposits.) If I did it again, I would have an attorney draft a lease.
3. With our more recent property, we had done a ton of beautiful landscaping that we wanted to ensure was not neglected, so we included a yard maintenance service with the lease and incorporated that into the rent cost. That was a win-win because many tenants found it very appealing, and the property still looked great when we sold it a few years later.
4. We purchased and maintained a home warranty for that same house, and it paid for itself when the fridge broke and the warranty replaced it. We also had the heat & AC system maintained bi-annually. Definitely be proactive with maintenance.
5. Do you have a plumber and any other relevant maintenance/repair people that you have used and trust? If not, you should have that lined up in advance because you do not want to be Googling that shit at 11pm when your tenant calls because the bathtub faucet broke and water is pouring out.
6. Get to know your tenants a little bit if you are self-managing. Meet them in person, be approachable, send a holiday card, etc. We found that to be mutually beneficial where we would be flexible and accommodating for good tenants when they needed it, plus our tenants knew we were real people and not a corporation or a hands-off landlord.

We sold our rental right before COVID and I am honestly soooooo glad for that. It would have been a really tough time to be a landlord. MH would like to do it again, but I still feel a little burned from the last tenants negotiating for a reduced rate in exchange for a 2-year lease and then breaking it only a few months in and being jerks about it. The property taxes in our area have also gotten so high for secondary properties that it was changing the financial picture. Let me know if you have any questions.

[caer]

If there’s anyway to find a property manager, I highly recommend it. We use a realtor who does property management on the side. She finds us the tenants, does the lease and walkthroughs and is available if we have questions. She charges us one month rent for a new tenant and $200 for a renewal. It’s worth it for my sanity lol.

Having a general handyman is super helpful, so you’re not constantly calling separate companies for tiny repairs. I love that I can call our guy to look at the dishwasher and repair drywall and check on the deck board, etc.

As someone above said, sometimes it’s awesome and you have great tenants and nothing is wrong with the property. Sometimes is a giant PITA and people suck and everything is breaking. I don’t regret getting our rental properties and the extra income is awesome. But there are definitely times I’m over it!

[Cher]

We rent out a beach house, use a house manager and we decided to stop renting it out, lol, so…..

Having the mortgage taken care of is nice but it wasn’t worth the headache for me, especially if it’s a home you have an emotional attachment to. That said, I would find a house/property manager to take care of everything. Use an LLC. Get umbrella insurance. Don’t let your renters know you exist.

[piratecat]

Thanks everyone. I think we'll try managing it ourselves for the first year and see how much of a pain it is and we will definitely consider switching over to a property manager. We do have potential candidates we can call on for small repairs and such. We're doing credit/background checks and that has been helpful in weeding people out.

The housing market here (for both buying and renting) is really tough so we're getting a ton of interest and I'm already not looking forward to having to turn all these people down.

[edubs]

Really do your homework on tenancy rights and landlord responsibilities for your area. Where I am it is really difficult & can be expensive to evict a bad tenant. There have been absolute horror stories.

Make sure that they have renter’s insurance. If there are quirks to your place, make sure that they are aware and understand how to take care of it. Even common sense stuff, what gets flushed down a toilet or what can get put down a drain, taps to the outside of the house that may need to be dealt with durning winter. If they are renting the whole house that they have a good understanding of how to reset fuses and turn the water off. Unfortunately I am speaking from personal experience on some of these.

[grumpycakes]

You’ve gotten some good advice. We managed a rental ourselves and, as mentioned before, it’s really great and easy with good longterm tenants and it’s awful with bad tenants and hard if you have a lot of turnover in your tenants. Our particular rental seemed to attract young couples who were moving in together as the first stop on the way to marriage and kids. I think we had a lot of turnover because they typically moved onto home ownership in a couple of years. One thing I found helpful was to keep the rent the same every year if I had tenants who were good. If you stay just a little under market price, people are less likely to look for greener pastures.