anyone ever rent out their house?

[unblock]

i am likely to need to move from new jersey to connecticut within a year. my job's home office is moving, so now my sucky commute into manhattan only gets me to the branch office.

obviously, i could sell my current house and buy in connecticut. but, depending on my economic forecast at the time, i might look into buying the new house and renting out my existing home.

i know that the current tax laws favor this, assuming -- big if -- housing prices continue to rise, i can sell the house three years later than i otherwise would, and the gain would be tax free (there's a $500,000 limit for marrieds, but don't worry, we won't hit that).

other than that, and having seen "pacific heights" and "duplex", i know basically nothing about renting out property.

for starters, if i know my house's sale price, how can i convert that to the estimated monthly rental price? also, how do mortgage companies look at this situation, i.e., would i still qualify for the same mortgage or is having a rental property a plus or is it a minus from the lender's point of view? my guess is leverage = risk, so it's a minus, on the other hand, extra income = improved cashflow = lower risk, so who knows?

thanks in advance!

[Demeter]

1. I've Done It, Twice

with the help of a hard-working property management(small time) firm.


They screen the renters, provide maintenance, and make sure the rent is promptly paid. They are worth the fee. They can advise you on going rates for rentals, handle security deposits, etc.

If you aren't free to return at a moment's notice, this is the way to go.

[jmowreader]

2. A BIG part of my business is owners of rental property

I have a whole line of millwork I keep specially for rental property owners. It's the least expensive millwork that will stay together.

When a renter moves out of a property, the owner or his agent comes to Home Depot to renovate the place for the next tenant. Almost without exception, the owner will leave my store with the following items:

Two storm doors
One entry door
Two entry-door locksets--these are almost invariably changed even if the renter doesn't destroy them; this prevents someone from renting a place, making a duplicate key, trashing the joint, hauling ass in the middle of the night without paying rent, then coming back after the place has been relet and taking all of the new tenant's stuff.
At least two interior handlesets
Two sheets of drywall
Ten gallons of paint
At least one piece of glass

The saddest rental owner I ever saw came in and said "I need everything. I'm fixing this place up and selling all of my rental property. I hate this fucking business." Turns out that the property owner had been getting stiffed by this renter for a couple of months. Finally he decided to drive over and ask them for some money. He got to his house and found it empty. Really empty. The tenant's shit was gone. The appliances were gone. The lighting fixtures were gone. The fucking WINDOWS were gone. You got to be one worthless cocksucker to steal the windows. The SOB had two huge dogs that he hadn't declared; they pissed on everything. There were dog-piss stains halfway up the walls. The light-beige carpets were soaked with dog piss. Someone practiced karate kicks on the walls. The wood shadowbox privacy fence the owner made himself had been destroyed. The place was completely trashed. Three of us spent two days in there making an estimate; we managed to write the house completely off. (The property owner finally decided to pay the place off and donate it to the fire department.)

[SoCalDem]

3. My mother had rentals.. and boy what a headache...

Sometimes they were in such shape that a match would have been the best alternative :(

[Mizmoon]

4. You don't have problems if you screen properly

Most of the time the horror stories you hear are about landlords who don't understand that renting a place is a business. If you screen tenants properly you should have no problem at all.

Rent it out through a real estate agency because the potential renters have to pay them a month's rent, plus pay you a month's deposit, and pay you the first month's rent. This means they have a lot at stake in their new home. The agent also does the credit check and should tell you what their FICO score is.

I suggest you find a trustworthy handyman type in your town who you can call to answer potential emergency maintance problems. Use a professional lease that includes their responsibility to clear snow and mow the lawn.

I've rented to people for years and have no horror stories to tell.

[mapster]

5. We did it

while we were living overseas in the 80's. We turned it over to a property management person and found out later that she had rented it to the owner of a porn book store. The store was always getting picketed and we swore that if anyone found out where she lived we would kick her out. Her dog (huge dog) chewed the corners off all the wood porch steps and they stole a couple of old license plates that were attached to the wall of the garage. Not nice people. Thank God they moved out early.

[TrogL]

6. I sublet my apartment

and the guy wrecked it. He set up a furniture repair business. I almost got sued.