Your opinions of owning rental property.

[Tobin S.]

I have a condo that's been for sale since late December and not one person has looked at it. I live about 50 miles away from there now in a different state. I was thinking about renting it and I think I'd have better luck going that route. It is a small, apartment style condo. But I don't know much about handling a rental. What do you all think?

[freshwest]

1. Let a real estate firm handle vetting the renters, collecting rent and dealing with repairs.

[travelingtypist]

5. This.

I'm in Oregon and my landlord lives in DC. He has four rental properties here and he's always, always having problems with finding good renters, people who will stay, and so on. He's a hands-on guy who likes to rescue head cases like me -- he's an ex-priest -- I can't pass a normal background check because of my felony conviction. He wanted to know all about it and was fine with it because I told him upfront that I had a problem. I think he enjoys the drama, but you might not.

[Gormy Cuss]

21. Yes, if for no other reason than the OP doesn't live nearby. n/t

[petronius]

2. I'm sure you'll be a better landlord than the tool we rent from

:)

I have a few friends that do it, and it seems like it can be a hassle, especially at a distance. It really seems like a good idea to have a local management company handle the busy-work... Good luck!

[pitohui]

8. the property manager will steal from you, guaranteed

one of my friends is out a million dollars and is now bankrupt, since he can't work and is older, this is truly a problem for him that will never be solved

his life is ruined

an investment you can't manage yourself is an investment waiting for a sociopath to take over and steal your money

reason no. 1 why being a landlord doesn't work if you're a decent honest human being, if you manage the property yourself, you don't collect any rent, if you hire a scumbag to collect the rent, she steals all the money anyway

[Chan790]

15. Your cynicism is refreshing.

:eyes:

Actually, it's just cynical.

Just a general rule of thumb, absolute statements are generally false. There are perfectly reputable property management companies out there and most realtors will also handle property management.

[RedCloud]

3. Good people should be landlords!

[applegrove]

4. You have to be really aggressive to be in the rental business. One of my landlords

once had a property manager who played fast and loose with money. I asked him why he hired her and he said "sometimes you actually don't want your employees to be too nice". I've dealt with a landlord or two in my lifetime and they were the whole scope of personalities. I once worked with a group that helped homeless people. I worked on a relationship with a landlord and asked him to send rent controled apartments my way for people who really needed it. He did and it didn't work out (he wanted something extra which was illegal).

[pitohui]

6. most of the people i know have lost everything trying to be landlords

is there any other business where you, knowing nothing, think you can make a profit where the people who have studied this business their whole lives cannot make a profit?

not one person has looked at your property, not even a lowballer investor who would buy and rent...this tells me here that there is no rental market

but go ahead, try it for yourself, and lose a lot more money

i hate to be cynical but i don't know any amateurs who have profited from renting their apartments

i know many people, some very dear to me, who have been hurt VERY badly because they tried to do this

renters do not "do no harm," a renter who doesn't pay is also, very frequently, a scumbag who will tear out your air conditioning for copper wire or play some other cruel stunt, as revenge on you when you get sick of the renter living for free...almost no renters pay rent, at least in new orleans, i remember being made to feel a fool because i did pay back in the day...i'm now a homeowner but truly it is better to just live in the place or sell it than to rent -- why WOULD a renter pay? oh because their credit might get fucked? guess what, their credit is already fucked, that's why they're RENTERS

renters DON'T pay the rent -- unless you have a great lawyer and a great backup plan, if they had money to pay rent in today's real estate market they'd just BUY a home for cheaper and own the place...think about it, the nature of the beast is that a renter these days has some very serious problem because buying is cheaper than renting so the renter is some scammer who doesn't plan to pay or some person with serious problems who plans to pay but doesn't because they're a screw up

there is just too much cheap housing in this country, there are exceptions, sure, but for the most part, if someone has to RENT, they are a fuck-up or just too low income to really make it pay for you

sell or walk away, but renting to somebody else will just cost you more money in the end

[travelingtypist]

7. Uh, been renting for four years here.

I pay my rent every single month. My landlord loves me. I'll leave the place in better shape than I found it.

So, uh, I think people can disregard every single thing you said as, well, I'll leave the rest to the readers' imaginations.

:puke:

[elleng]

9. I agree.

After all, people are people, and we make decisions based on our judgment.

Toby, you're not far from your condo, so you could do either, imo, keep an eye on renter or agent, and do well.

[travelingtypist]

11. Thanks elleng.

That post was so insulting that it was really hard for me to not come out with a string of insults and expletives that would get the post deleted. What a serious load of absolute, bitter crap.

[Chan790]

16. Par for the course...

some people are just so miserable as a default state of mind, the sort that if they won the lottery would scream in anguish "Oh no! My taxes are going to go up!!"

[Codeine]

12. I rent. I pay every month. I'm not a fuck-up.

Real dick statement there, dude.

[travelingtypist]

13. Renters of the world unite!!!

:loveya:

[NV Whino]

14. Oh here, let me get you a broader brush

I'm a life long renter and do not fit your description. I've been in my present location 27 years and take care of it as if it were my own. And there's no way in hell I could afford to buy even in this depressed market.

[Bunny]

17. Wow, this is an amazingly douche-y post, even from you.

I may have to congratulate you on this one - it gives you a real boost of confidence when you achieve a personal best, doesn't it?
:thumbsup: :patriot:

[fishwax]

22. wow

:puke:

[riderinthestorm]

10. Tobin, I don't know your area so take my advice with a grain of salt

I've owned two different kinds of rental property.

1. I've owned a vacation cottage that was 3 hours away. It rented weekly for summer guests in MI on Lake Michigan. We had it professionally managed and it was easy. It paid for itself (mortgage, taxes etc) and we got to use it in our "down time" during the winter months. I would do this kind of rental again in a minute.

2. On our farm we have a house that we rented for 12 years on an annual basis, something like what you want to do. We managed this ourselves. Our biggest problems came when we didn't do background checks. One time I rented to a Baptist minister and his family who were waiting for their parsonage renovations to be completed: they were the worst. I didn't do a background check "trusting" to their avowed religiosity and I paid, big time for my "trust". Don't ever trust anyone! Do a background check.

Best is if you know someone who is looking for a rental - ask around and put the word out that you have this rental and are looking for referrals. A $50 kickback for a good referral that actually RENTS from you, is worth its weight in gold. Then your friends are invested too in it's success.

You need to consider if you'll allow pets or kids. You don't have to actively discriminate but you can get a lot of clues from what the new renter prospects say.

50 miles away isn't an impossible distance. You can monitor what's going on there on a weekly basis if you wanted to, by a simple drive by.

Good luck!

[NV Whino]

18. If you choose to rent out

get a management company. And don't trust the management company to actually do a good job. Do inspections and drive-bys yourself on occasion. Don't expect to make money, but rental income should be enough to pay the condo expenses. If you want to handle it yourself and if there is a university or hospital nearby, contact them and tell them you have a rental. You may have a high turnover with professors and doctors, but they are generally pretty reliable. And you have a steady supply of renters.

Note: I manage properties for weekend owners in the Napa Valley. I was recently asked to manage a rental property and I turned it down because of the hassle. I sent them to the local property management company that handles rentals. One of my clients rented an extra house out once. The first renters were a dream. The second renter we had to evict... or would have if the DEA, FBI and sheriff hadn't intervened. It was a major mess to clean up. The house now has sat empty for 3 years while he tries to sell it.

[Moondog]

19. I've done it a few times, with and without property managers.

Each time, however, it was a property that I wanted to own for a longer period of time. And the numbers "worked" - the rent received covered the expenses.

That said, often there was a fair amount of damage. And as a result of that, quite a bit of aggravation.

I would not do it again. Under any circumstances. I'd take the loss. But, as the first part of my post suggests, I can afford to eat a loss like that. If you cannot do that, you have a couple of less than attractive choices. Figure out which one is least bad, and go that way.

[davsand]

20. Conventional wisdom is that you have to be prepared for problems.

Locally the owners of rental properties will do some surface stuff like maybe painting and shampooing carpets but major rehabs and upgrades usually are put off as long as possible because the conventional wisdom is that renters just don't care for property like owners do. Frankly, I've seen it go both ways and I do not think it can be just assumed that a renter is gonna trash your place.

I do think that if you live 50 miles from this place that it is gonna be a real PITA (pain in the A**) to deal with some of the stuff that can go with being a landlord--stuff like the midnight call saying "I've locked myself out..." or "I smell gas when the furnace kicks on..." It does happen, and it can make you nuts.

I'd echo the suggestion of a property management company IF YOU CAN AFFORD IT!!! They usually take a percentage that feels ungodly high to an owner who is just trying to cover the expenses. If you choose not to use a property manager, then I'd suggest STRONGLY that you have a lawyer you trust draw up your lease (Frankly, I'd do that anyway, but that is just me. A little pain up front can save you a LOT of pain on down the road...)

ALWAYS do a background and a credit check. Do not just go through the motions, take it seriously. You have an investment there, and you are handing somebody the keys to it. You need to know who and what you are dealing with. If they have lousy past credit when it comes to housing you need to know that and make your decisions accordingly. I'm not saying there aren't times when people need some help, but if you are gonna help somebody, the decision should be yours to make.

Similarly, if this person has never been able to get back a damage deposit, there might be a reason for that, and you might want to think about it before you invite them into your property. There is no guarantee that they will trash your place, but if there is a pattern of that behavior you need to know that.

I'm not even gonna try and discuss why it is a bad idea to rent to somebody with a laundry list of criminal arrests, but it doesn't take too much energy to see how MAYBE you want to know that before you rent to them.

One last thing I want to bring with you is the question of rent. Can you cover your expenses, plus create a reserve against future repair needs, and still be within the market rents for that area? I'd suggest a chat with not only your accountant about how much you need in rent to cash flow it, but I'd also do some checking on market rents in that area of town. What you may need to make may not even be possible given local market conditions.

If you really want to sell that place, I'd suggest talking to a realtor or broker who has been in the business for several years, and I'd tell them you want ABOVE ALL to sell that place, and you are willing to make some cash concessions to do it. In my local area, condos are a very tough sell right now, and I'd be amazed if you'd been able to sell a condo in this amount of time. I hope your local market is not in a similarly bad place.

Good luck!


Laura

[mnhtnbb]

23. If not one person has looked, is there anything at all selling?

You may be overpriced. Are you at all handy? Do you need to make
some cosmetic updates to make the property attractive?

If there have been sales of similar sq. footage, age, condition of condos, then
you need to contact the brokers who handled those sales and find out what you
need to do to make your condo more appealing.

If there haven't been any sales, then you may need to consider renting the place.
I had a tenant in a studio apartment above the detached garage which didn't burn
when our house burned down. We're walking distance to the campus of UNC Chapel
Hill and studios are very attractive rentals. We've just rebuilt on the site
and I have re-rented the apartment to a new tenant.

If you have an appealing rental market--nearby University or major employer--
then that makes for a much easier rental. Still, you need to be able to check
out what's going on in your rental from time to time. The first time I rented
my own condo--couldn't sell--in the 80's in California, I discovered the woman
I had rented to had moved her sister and nephew into a 2 BR place! My uncle
had apartments in Seattle--where his son lives--while the uncle lived in Pasadena
and the apartments were nothing but headaches. My brother had apartments in Iowa
City and he and his sons did most of the work--and his wife handled marketing
the apartments and collecting rent.

If I were in your shoes, if there's any market at all to sell the thing, I'd go
that route before taking it on as a rental.

[TuxedoKat]

24. Renting

my mom has several rental properties. Some she manages better than others. She has had both good and bad renters, some which have done major damage and skipped out on paying rent too. She even had to evict one guy. I would think a condo would be much less troublesome than a house because you don't have to worry about maintaining a yard or the outside of the building. Is anyone else in the building renting their condo out? If so, perhaps you could get some advice from that person(s). Maybe some of your friends have friends or family members who do this too, so ask around. I wish my husband and I had held onto every property he or I owned but he didn't want to. One was a very easy rental too (a condo) in a a very desirable area but he wouldn't do it. I don't even like to imagine what that property is worth now. I would say go for it, but learn as much as you can about renting too and become familiar with your states' rental laws. The suggestion someone else made about contacting hospitals or universities is a GREAT idea too. Expenses for maintaining your property will be tax deductible too so start a file for all those receipts -- advertising, prop. mgmt. (if you use it), new appliances, condo fees are deductible too, I think, and be sure to include expenses to and from the property (gas*, food, tolls, etc.). Good luck.

*The IRS has a rate per mile but I don't know the current rate (probably at least .40/per mile or more and climbing).