First time landlord questions

[acemcmac]

I'm considering modernizing the 3 story colonial I just bought. One of the designs I really like converts it from 4 bedrooms, two of which you need to travel through (the office and the study) to get to other bedrooms into a very comfortable 3 bedroom house with none of those quirks, wider hallways, wider staircases, a far more interesting layout and walk in closets in the master bedroom.

The biggest advantage I can see in this would be renting out the two, new and improved larger bedrooms on the third floor. One renter, over the course of 5 years at market rates would offset the costs of construction. Two renters (one in each bedroom) would offset the morgage and all of my costs of living there (once the construction financing is over with).

Between these improvements adding to home value and the supplimental income of these renters helping to pay for it, I'd stand to gain up to 200k over 10 years that I wouldnt otherwise have if I left the home alone (taxes and transient periods figured in).

Annnnnyyyyyhhhoooowwww.......

The question:
Of those of you who have rented bedrooms in your home, how did you do it? What tips do you have (aside from first and last months rent, security deposit and a cash incentive for early notice of departure)? Is Craigslist the way to go? Thoughts?

 

[Deleted member 4644]

I personally do not own any property, but my family does and I know a few large apt owners. I just have two points of caution:

1) It is never (almost) easy or fun to be a landlord. You will deal with late checks, maintence, and other problems.
2) I would make sure I knew quite a bit about local population growth and the economy before investing a lot of money.

That being said, renting can be a GREAT way to pay the mortgage (or at least offset costs).

 

[d33pt]

They're basically roommates right? They will be sharing a common area? That kind of sucks. I wouldn't want to live in a huge house with random people. you should just rent the whole thing out after the construction.

 

[acemcmac]

Originally posted by: d33pt
They're basically roommates right? They will be sharing a common area? That kind of sucks. I wouldn't want to live in a huge house with random people. you should just rent the whole thing out after the construction.

Yeah. As much as I'd love to rent the whole thing out... I need a place to live myself and the whole reason I bought this place was because of how easily I'll be able to get into the city and walk to my office

I'd basically be shopping for roomates. I also think I'd be paying a lot less in maintanance if I was actually there 8 hours of the day if you know what I mean.

 

[acemcmac]

bump

 

[Ameesh]

defintely get roomates, i did that for my own first house and they paid for my mortgage, the extra cash i put towards the house helped pay down the principal.

 

[doze]

Personally I would never rent a room in a random persons house, and I wouldn't want random people renting space if I owned a home. I wouldn't mind giving a friend rent money if they owned a place because you already know their habits somewhat. You never know what your gonna get with a random person and if they are renting they wont take as good care of your newly remodeled place as you would.

 

[EyeMWing]

My landlord does something similar with most of his houses (he own a decent part of this neighborhood - I suppose that makes him more of a slumlord than a landlord, but he treats me well). Of course, he apartmentalizes and rents the WHOLE house, not just one floor.

 

[Amplifier]

Get a strong, landlord friendly, rental contract. Don't get the sht they sell at staples. And the second anyone is late on a payment enact your late fee. If you don't charge a late fee you will never get your rent on time. After their grace period, which should be 5 days or less, file for eviction.

Be very firm with your tenants. Just because they're roommates doesn't mean they aren't tenants. Any problem I've had with a tenant has been that I didn't put the hammer down at the first slip up.

And drugs, absolutely no drugs. I bought a house that was being occupied by two meth addicts, in the process of evicting them they decided to set themselves on fire and killed their three children. Drugs are bad MmKay.

 

[MrDudeMan]

as a current landlord of a 5 bedroom suburban home (which i also live in), it is with the strongest caution i tell you this: tell them ALL of your rules BEFORE they move in. you might think small, petty things will work themselves out and it wont bother you, but mark my words, IT WILL PISS YOU OFF! are you clean? i am! are the other people in this house? NO! i cant fvcking stand it when people eat and then put the plates/dishes/cups in the sink and walk away. put it in the damn dishwasher! dont let the trash bag overflow and smell up half the house! dont play music so loud i cant go to sleep at 11:00-12:00 at night. dont be a retard and take up 2 parking spaces in the driveway because you have no spatial skills. dont LEAVE THE DOORS OPEN AND LEAVE. dont turn the AC down to 68 and LEAVE.

ok, i may seem like a PITA, but i thought all of that stuff was common sense. dont be wasteful, respect other peoples stuff, and basically be a civilized human being. apparently, however, i am more responsible than 95% of people since i can clean up after myself, dont live like a pig, and am considerate of trivial annoyances like taking up too much room with my car so people cant park. seriously, renting to people can really suck and stress you out no matter how unstressed out you claim to be. they will mess up your house, spill on the carpet, ding the walls with stuff, leave the lint screen in the dryer untouched so it prematurely breaks, eat your food even if you think that it wont happen, leave trash around in random places and/or dirty dishes, nickel and dime you for repairs they claim are regular maintenance even though they broke it, clog the garbage disposal because they dont know you cant put eggshells, potato skins, PAPER TOWELS, etc. down it, and last but not least, invite people over without checking with the other roommates and causing problems. it isnt a big deal to say "hey im going to have some people over this weekend, is that going to be a problem for anyone?".

good luck. i didnt even talk about late rent or breaking a lease agreement.

 

[MrDudeMan]

Originally posted by: Amplifier
Get a strong, landlord friendly, rental contract. Don't get the sht they sell at staples. And the second anyone is late on a payment enact your late fee. If you don't charge a late fee you will never get your rent on time. After their grace period, which should be 5 days or less, file for eviction.

Be very firm with your tenants. Just because they're roommates doesn't mean they aren't tenants. Any problem I've had with a tenant has been that I didn't put the hammer down at the first slip up.

And drugs, absolutely no drugs. I bought a house that was being occupied by two meth addicts, in the process of evicting them they decided to set themselves on fire and killed their three children. Drugs are bad MmKay.

good advice. if you want some help with a lease agreement, i can send you mine. its several pages and has been very thoroughly revised several times over the course of a few years.

 

[Dabappa]

If possible, you might consider renovating to make an "in-law" apartment.

My basement was set up this way with its own kitchenette, bath, 2 bedrooms, living room, and separate entrance. In my area a connecting interior door to the rest of the house is required, but it can just be dead bolted shut. Technically, it should only be rented to family, but enforcement is non-existent here unless neighbors complain.

You could live in the small part now and rent out the main part of the house. And, you would have the option of moving into the bigger part and renting the apartment later if your situation changes.

Keeps the roommates/tenants completely separate, except for possibly some of the utilities.

Of course, you should check the local codes first.

 

[daveymark]

craigslist worked for me. I usually look for professionals, make sure they have good credit, and get 1st and last month's deposit. haven't had a problem yet. you don't want scum hippies smoking weed all day, or college students, etc. you want someone who will really only be using the place as a place to sleep. don't use prior landlord's words as a substitute for bad credit, it might be that they just want the tenants out of their place. Check craigsist housing section under discussion for a ton of tips