question about renting my house out

[Semidevil]

so I'm thinking I would probably like to rent my house out, and I will probably just live in a smaller apt(as that is enough for me).

Good thing is that while I'm saving money living in a smaller place, someone else is paying my mortgage and building my equity.

bad thing is that I'm scared of someone either 1)trashing the house, 2)does not pay the rent and puts me in a bad financial position with 2 dwelling payments.

Has anyone ever done this? Will I need a lawyer to draft up the contract? What other legal jargon do I need to worry about and how do I find the right tenants?


any experience whether this was successful or not?

 

[olds]

They will thrash your house and it will likely cost you money.
Say you get a $1000 for a deposit. Say it cost you $2000 to get it ready for a new renter. Will you have banked enough money to cover it. Or more?

 

[D1gger]

Spend time interviewing a few different perspective tenants and make sure you check all their references.

As for the legal agreement, you can usually find self help legal forms at stationary stores that will cover the basics for whatever jurisdiction you live in.

Keep in mind that a legal agreement is the last resort in resolving any disputes and that the best way to avoid the problems is to do your due diligence up front and spend the time and effort finding he best tenants you can.

 

[OCGuy]

You generally hire a Property Management company. They usually take 6-8% per month of the rent as thier fee.

They are alot better than just trying to rent it yourself. They keep it strictly business. If you deal with the renter yourself, they may start to take advantage of you if they sense weakness. For example, giving you a sob story and wanting to pay 2 weeks later.

There is no guarantee against someone trashing your house. But you can specify that you only want people with great credit to live there. This shows owner responsibilty, etc.

 

[nerp]

People will check out great and then all of a sudden they start raising doberman pincers in the basement and the 11-year-old daughter practices rollerblading in the upstairs hallway.

If you want to ensure your house is properly trashed, rent it to college students.

 

[Ksyder]

I have to ask... if you are paying rent, your net savings on your mortgage payment is going to be low. Obviously after you include property taxes especially. How much do you stand to get out of the deal every month?

 

[imported_weadjust]

Link to landlords forms page.

http://www.angelfire.com/oh/porterentps/formcorner.html

I have one rental property. It's a pain in the ass. I would advise to have at least 5k in reserve. A/C unit could go out tommorow and the tennant skips on the rent.

 

[AlienCraft]

Originally posted by: Ocguy31
You generally hire a Property Management company. They usually take 6-8% per month of the rent as thier fee.

They are alot better than just trying to rent it yourself. They keep it strictly business. If you deal with the renter yourself, they may start to take advantage of you if they sense weakness. For example, giving you a sob story and wanting to pay 2 weeks later.

There is no guarantee against someone trashing your house. But you can specify that you only want people with great credit to live there. This shows owner responsibilty, etc.

This. :thumbsup:
Anything else = :thumbsdown:

 

[geckojohn]

Make sure that you discuss this with your home insurance agent so that you have the correct type of home insurance policy when renting out your home. Some insurance company's call this a landlord insurance policy.

 

[paulney]

Originally posted by: AlienCraft

Originally posted by: Ocguy31
You generally hire a Property Management company. They usually take 6-8% per month of the rent as thier fee.

They are alot better than just trying to rent it yourself. They keep it strictly business. If you deal with the renter yourself, they may start to take advantage of you if they sense weakness. For example, giving you a sob story and wanting to pay 2 weeks later.

There is no guarantee against someone trashing your house. But you can specify that you only want people with great credit to live there. This shows owner responsibilty, etc.

This. :thumbsup:
Anything else = :thumbsdown:

True dat. Double true.

 

[hjo3]

What's the difference between your mortgage and the apartment's (estimated) rent? Unless the rent is less than 60% of what you would pay for the mortgage, I'd say it's a bad idea. FWIW Clark Howard warns against the exact arrangement you're proposing.

Maybe a better path would be to rent out a single room while you still live in the house?

 

[Vette73]

Originally posted by: krwilsonn
I have to ask... if you are paying rent, your net savings on your mortgage payment is going to be low. Obviously after you include property taxes especially. How much do you stand to get out of the deal every month?

Yep. A better idea that gets you extra money and protects your house is to rent a room.

 

[Semidevil]

Originally posted by: AlienCraft

Originally posted by: Ocguy31
You generally hire a Property Management company. They usually take 6-8% per month of the rent as thier fee.

They are alot better than just trying to rent it yourself. They keep it strictly business. If you deal with the renter yourself, they may start to take advantage of you if they sense weakness. For example, giving you a sob story and wanting to pay 2 weeks later.

There is no guarantee against someone trashing your house. But you can specify that you only want people with great credit to live there. This shows owner responsibilty, etc.

This. :thumbsup:
Anything else = :thumbsdown:

update: I have decided to use a property management service. I looked up a few in my area and am asking them to provide me with their costs and copies of the agreement and cotracts.

Do you guys have tips or suggestions to find the best property management service? I'm sure there are good and bad ones.

 

[amdskip]

Answer the above questions, I really don't see you gaining all that much doing this. I think you could gain a lot more renting out a room.

 

[Capt Caveman]

Get references and check with your local BBB for complaints.