Any landlords here?

[debian0001]

Hey guys, I was wondering if anyone here rents out houses? Is it worth it? Do you do it in the suburbs or in a city?

 

[brianmanahan]

i have thought about it, but just ended up buying reits instead

i think the first time somebody called me at 2 AM because something broke, i would flip out

plus my grandpa had horror stories about renting a duplex out. a person painte the whole interior black (INCLUDING THE WINDOWS), then couldnt afford to pay rent because they had no money, so it was pointless to try to take them to small claims.

some people swear it works for them though. i assume doing it in a less ghetto place helps. plus you can supposedly take advantage of market inefficiencies easier than in the stock market, as well as apply more leverage.

still 2 much work 4 me

 

[debian0001]

Yeah, tenants can be wild. The houses I'm interested in are in the burbs near some lakes. If it doesn't work out for me, I can always move in. I currently live in Chicago and love it here but sometimes I want a house with a garage.

 

[Elixer]

It is a huge hassle, and you need lawyers to make sure all the I's are dotted, and the T's crossed. It also really depends on how well you screen the tenants, and to make sure you follow all laws / regulations about that stuff.
Then you got to have stellar insurance as well.
Then you take care of all maintenance (unless you put it in the contract that tenants take care of it).

It isn't exactly cheap either.

If you are thinking this is a good way to earn $$$, then.. it could be, but lots of people go into this kind of thinking thinking they will make $$$ and end up losing everything.

 

[mikeford]

Unless you are naturally a total douche being a landlord usually doesn't work out.

 

[John Connor]

Not a landlord, a sealord. Master of seamen. LOL

 

[Imp]

Nope. The guy behind me at work has a trouble tenant though. She not paying and dragging her feet on leaving. Good times...

 

[mizzou]

Nope, I'm not even going to consider it on mine.

 

[Red Squirrel]

I've thought about it but from what I hear it's lot of hassle. Problem is all the laws protect the tenants and not the land lords. Tenants can basically just refuse to pay rent and you're not even allowed to kick them out or do anything. They can trash the place and there's nothing you do.

If I did do it, I would probably charge above market value and hope I end up with good tenants. My theory is that the trouble makers would probably not want to pay more than they have to. Not sure if that really is what would happen though considering they don't even have to pay if they don't want to.

 

[MagickMan]

Yes. Unless you don't care about the property, make sure to vet prospective tenants carefully, going over all references. No references? Trash the application. If you find anything shady? Trash the application. If there's an inconsistency? Ask about it and follow-up, and unless there's a very good reason for it, with proof, trash the application.

Why all that? If you discover they're a crappy tenant later on, you're screwed. Because in most states, once they're in there, getting them out is damned near impossible, so long as they keep paying rent. They ruin the place; shit in the floor, raise llamas in the living room, cook meth in the kitchen, etc? It doesn't matter. Evictions take forever and that whole time they're wrecking the place, because they know they're leaving anyway. That $1000 damage deposit won't go very far, when you have to; redo all the carpeting, replace vinyl flooring, fumigate, patch all the sheetrock, buy new fixtures, and repaint.

 

[Jimzz]

Yep good screening and depots are key. A big one I would do is ask for the 2 last places they rent from. If they differ from the address on the drivers license then make it 3.

 

[skull]

I've thought about it but from what I hear it's lot of hassle. Problem is all the laws protect the tenants and not the land lords. Tenants can basically just refuse to pay rent and you're not even allowed to kick them out or do anything. They can trash the place and there's nothing you do.

If I did do it, I would probably charge above market value and hope I end up with good tenants. My theory is that the trouble makers would probably not want to pay more than they have to. Not sure if that really is what would happen though considering they don't even have to pay if they don't want to.

I don't know how it works in commie land. Down here in the US the day they don't pay on time you slap them with an eviction notice. Then you file the eviction, get a court date, go to court, get a judgement(its not that hard). Then set a date to meet them with court baliffs and you set all there shit to the curb.

Depending on how quick you go with the process there out in a little over a month to 3 months. Most landloards give tenants time to pay because in reality they don't want to have to fix the place up re rent it etc.

 

[Blackjack200]

Yes, the money is good, but it is huge headaches.

On Friday I got a call from my tenant that there was "a pipe leaking in the basement". Turns out they were flushing baby wipes down the toilet and clogged the sewer line. I got a plumber out there to snake it out. $375. On Sunday I called the tenant and told him I would be sending him the invoice. He was upset but said he'd pay it. We'll see.

Fun times.

 

[highland145]

Yes, the money is good, but it is huge headaches.

On Friday I got a call from my tenant that there was "a pipe leaking in the basement". Turns out they were flushing baby wipes down the toilet and clogged the sewer line. I got a plumber out there to snake it out. $375. On Sunday I called the tenant and told him I would be sending him the invoice. He was upset but said he'd pay it. We'll see.

Fun times.

This. Tampons in the septic tank....idiots.

Every time the caller ID would pop up with their name..."What now?" But I was dealing with low income. A guy I know has a higher $$ place and he's never had a problem.

 

[mrrman]

Yes, the money is good, but it is huge headaches.


Fun times.

I always right up an addendum and attach it to the rental agreement so that the tenant is aware if other issues/concerns that may come up. Money is great since it makes my living easier and honestly I wouldn't have it any other way.

 

[NetWareHead]

I don't know how it works in commie land. Down here in the US the day they don't pay on time you slap them with an eviction notice. Then you file the eviction, get a court date, go to court, get a judgement(its not that hard). Then set a date to meet them with court baliffs and you set all there shit to the curb.

Depending on how quick you go with the process there out in a little over a month to 3 months. Most landloards give tenants time to pay because in reality they don't want to have to fix the place up re rent it etc.

In NJ, the law says that a tenant can have up to 6 months of stay in a place without paying rent before an eviction can be enforced. Other states have different law. Tenants can always go to court and get a bleeding heart judge to side their way. If there are kids in the picture, worse for the landlord as most judges will allow the max amount of time to avoid putting a child out on the street. Thats why, when the rent is late and the next day after their grace period, they get an eviction notice and one gets filed in the courthouse. The clock starts ticking the moment they screw up and if I am potentially looking at 6 months of no rent, I won't wait an extra day to start the ball rolling.

 

[Hacp]

I rent out a room in my apartment. There are a few things you need to understand before going through the process.

1. Should you buy?
If the Price to Rent ratio is low (1-15) then you should buy if you want to be a landlord. Price to rent ratio is (Price of House)/(Cost of Renting for 1 year)

2. Furnishings
Make sure you furnish your apartment with cheap and durable things. Laminate Floors, ceramic or laminate in bathroom or kitchen, laminate countertops. Expect to replace flooring/doors/wall painting once every 3-5 years.

3. Right Tenant
You want to make sure your tenant can pay your rent. That means a stable job. Its OK if he is messy, as long as he can pay rent. It is important to have a good tenant rather than a tenant that will pay more. If you find the right person after a year, don't be afraid to lower rent to keep him!

4. Most Important! Do you want to put in effort?
The nature of renting means you will need to deal with your tenant. He or she may be difficult to deal with. Things may break. You need to be there to fix things or have someone there to fix things asap (for example if a pipe bursts). It is a LOT of hassle. Worst case scenario, your tenant sucks and doesn't pay rent. Then what?

 

[cbrsurfr]

I'm a landlord but not by choice. I bought near the top of the bubble and after all the repairs and upgrades the house is worth less than half what I have into it. Luckily I'm renting it to a family member, so it hasn't been too bad. The only time they were a PITA is when the AC broke (less than 2 years old BTW) in the middle of the summer.

 

[Scarpozzi]

It totally depends on where you live and what you can buy/rent a property for. There are probably some good calculators and spreadsheets out there to help you figure out whether or not a property would make a good rental....

What you have to factor in is upkeep, cost to acquire tenants, insurance, taxes, and management fees...tack all that onto the mortgage + depreciation/appreciation and see if you're in the red or black. Most management companies will charge either flat-rate or 10% of rent. It's worth paying them sometimes just so you don't burn time dealing with tenants or keeping the unit rented. In the long run, you're just trying to pay for the property so it can become a true revenue stream.

I had a rental for 5 years, but it was an apartment behind my house with shared utilities. I was able to make bank off the apartment and due to the neighborhood and its proximity to a university, I never had a problem getting students to rent from me....paid for by parents. Because I lived so close and small square footage, I never worried about parties, etc...

 

[NetWareHead]

One thing I think works very well for me is to put the word out there with a few realtors that I am looking for a tenant. The tenant when he signs the lease pays the realtor, usually one month's rent goes to the realtor as a finder's fee.

If the tenants knows he had to pay a finder's fee, he will less likely to do something to get evicted and I think its a better class of tenants than anyone else off of the street. I get them to sign one year leases and so far all of my tenants have renewed for a few years.

If they are good tenants and dont give me problems, I usually wont raise the rent much if at all (barring any significant increase in expenses on my end). I use the time between tenants as an opportunity for any major renovation and rent increases.

 

[DesiPower]

DIY landlord is a bitch, get property manager. I have 3 rental properties, for one of them I tired DIY, it was a big hassle, now I have manager for all 3, through 3 different companies. 2 of them are very good, good tenants and good managers, no issues. 3rd one, the property managers are thieves, and they put BAD tenants without proper screening.
If you want to be landlord, IMHO, get property manager and make sure you have enough margin for their fees. AND find good property manager, get references.

 

[DrPizza]

Yes. Unless you don't care about the property, make sure to vet prospective tenants carefully, going over all references. No references? Trash the application. If you find anything shady? Trash the application. If there's an inconsistency? Ask about it and follow-up, and unless there's a very good reason for it, with proof, trash the application.

Why all that? If you discover they're a crappy tenant later on, you're screwed. Because in most states, once they're in there, getting them out is damned near impossible, so long as they keep paying rent. They ruin the place; shit in the floor, raise llamas in the living room, cook meth in the kitchen, etc? It doesn't matter. Evictions take forever and that whole time they're wrecking the place, because they know they're leaving anyway. That $1000 damage deposit won't go very far, when you have to; redo all the carpeting, replace vinyl flooring, fumigate, patch all the sheetrock, buy new fixtures, and repaint.

AND, even if you do check out the tenants, there are no guarantees. We rented to a coworker of my wife. A nurse. Her kids were just hitting the magic age (16ish). Daughter had a baby - that meant it was virtually impossible to have gotten them thrown out with an infant. The mom worked nights - the sons threw parties. Fights, holes punched in walls, doors kicked in when mom got mad and locked the boys out, etc. And, completely idiots - replaced the shower head with a cheap $9.99 one from Big Lots - the crap that has plastic connectors. They overtightened the connector, a significant amount of water was spraying out sideways over the shower curtain. The downstairs kitchen ceiling was sagging and full of mold by the time they reported that I had a leaking water line. Tore the rotted ceiling out, and pointed out that the water lines are no where near the "leak." Showed water stains that indicated the water came from the floor in the bathroom. They denied that they caused it right up until I went up to the bathroom and turned the shower on. "oh, I never noticed that." The floor is fucking'ing soaked? How could you miss it? Of course, the water would have pooled on the linoleum had their dog not torn the linoleum apart.

Once the kids hit 18, the mom left them. She moved to Florida, and left the kids in the house. So, of course, no rent was paid. Dad stepped in, moved into the house with the kids and started paying regularly. Dad shaped up the kids (thankfully). The dad started making repairs. Then, the dad wanted to buy it on a land contract - sure! Anything to get us out of it. A few years later, and instead of getting a loan for the house, the dad got a loan for a different house in a different neighborhood - and he left his daughter in the house or sons or.. I haven't a clue who even lives there now. He wanted to turn the land contract over to whichever child it was in the house. "Nope." So, the father still makes payments to us. Not sure if he gets the money from the kid, but whatever. It's going on 10 years now that we've rented that house out. If they up and move, I hope it's in May or June so I can spend my summer repairing it.

 

[z1ggy]

Yes, the money is good, but it is huge headaches.

On Friday I got a call from my tenant that there was "a pipe leaking in the basement". Turns out they were flushing baby wipes down the toilet and clogged the sewer line. I got a plumber out there to snake it out. $375. On Sunday I called the tenant and told him I would be sending him the invoice. He was upset but said he'd pay it. We'll see.

Fun times.

This is exactly what I want to avoid.

I'm probably just going to sell my house, even if it's for a slightl loss.

 

[BurnItDwn]

In the chicago area near some lakes ... So, Wauconda? Wonder lake? Island lake? Round Lake? Fox lake? or I'm way off?

My dad is a landlord and lives in a house in Mundelein, and he owns and rents out 2 more in Mundelein.

He loses a TON of money every year. His cash flow is pretty badly negative.
However, he's been paying down mortgages to the best of his abillity and I believe he will have 1 less mortgage to make payments on in the near future ... so going forwards, he may finally start to see some positive cash flow.

When you have a good tennant, they take decent care of the place and pay mostly on time. They are your bread and butter, and you love them and treat them well and generally, you give them some slack with the rent.

When you have mediocre tennants, they tend to always be behind a month on their rent, but, they take care of the place and try to make at least some payments

Bad tennants don't pay on time, and they are careless/do damage.

Then you have the nightmare tennants who completely trash the place and then abandon it or wait until you legally remove them.

My father once had to spend upwards of 10K to rehab one of is houses after a bad tennant was done with the place ... He did painting/drywall repairs himself. But, had to buy new appliances, and had pro's come in and give a good cleaning...

Anyhow ... if you can handle losing $10-20 thousand dollars in any given year due to abuse/bad luck, and you can handle doing some repairs yourself, then you stand to make some good money over the long run. But it's not free income where your money works for you so much as you're running a business and you need to have an active hand in it.

 

[ThinClient]

Always use a management company. Always.