Any real estate guys on here or renters?

[ws23jrt]

When I bought the place I live in now it came with a rented house. (1985)
A large property with two houses. I moved into the big house.
The existing renters for the other house paid $300 per month.
Fast forward--I raised the rent to $500 per month ten years ago to cover my costs for ins. and misc.
In all of these years, I have been nipped by my friends about not charging "proper" rent.
I even got crap from Turbo Tax that said I was perhaps causing an alert to IRS by being non conforming with my rent.-eek
Maybe I have been a jerk to myself. In the meantime, I have had the best tenants anyone can pray for. A family next door that were always there when I was gone for weeks at a time with my work was a big help. And when my son came to live with me it became easier to leave the pets for weeks at a time.
So now the longtime neighbors have moved on to a house at the beach. And in their place is the little kid I recall from when I moved in. He is their son with a wife and two kids.
They are again the perfect tenants and are happy and comfy knowing that $500 per month has value way past any complaint they may find. And they (like their parents) are willing to shoulder needed repairs and upgrades to their home to make it their home.

My story is not a good example for this thread. But it may show something of the value of the difference between a home and a house.

 

[monaco66coupe]

I am a landlord in a lower level city in New England. It's not easy. Been doing it for 16 years. In my area it is very difficult to weed out the bad tenants. Look up housing court records. That is a good sign.
When new prospects come for an interview they always put on thier nice face. The after a couple of months the real face comes out. I make good money but I am always cleaning up messes, repairing and replacing things.
Just know that it's a second job.

very true, that is the name of the game. Everyone has a certain tolerance level for the scum.
I try to stay optimisitic, as 45% of the people in this country have to rent.

 

[repsol17]

I'm an owner of 2 properties that I rent. Been renting them for nearly 12 years now with only 1 eviction (south Florida) and that happened just over a year ago.

Don't rent with a bleeding heart. I did with a recent tenant who had been renting from me for 3 years. I learned at the cost of 2 months rent ($3000). Once they fall behind the chance of EVER catching up will be slim to none. It all could have been avoided if I didn't sway from the contract..totally my fault !

It's a little work up front but it's all for your protection. You're gonna have to play a little detective if you want to save yourself from a property manager, which you don't need. It's all very easy with the computer.

Have all possible tenants fill out a brief questionnaire with a copy of drivers license. This is how you'll run a back ground check (cost a few bucks but simply and online), research the names through the courts records for any previous evictions, even the neighboring counties. References of previous landlords, current employer (addresses and numbers for all). Also require 1st, last and security deposit and start a second separate bank account solely for the rental/s. Anything and everything that involves the rental/s will use this separate account. Just easier record keeping than missing in with your personal accounts. Lastly, on your contract make sure you have an additional late fee after "X" amount of days late. I have a 5 day grace with a late fee of $25 after.

This was were I faulted as previously stated above. Once late..start the eviction process! You can do all this yourself also (No Attorney needed) and be your own carrier between the courts and the Sheriffs office or what ever dept that'll be delivering any eviction papers if need be. After I filed I have my tenant out in 18 days exactly.
Good luck

 

[YY1]

yeah, one of the first rules is a clearly established due date, and if it's missed file a 3 day eviction notice immediately. That trains them that you are not a pussyfoot.

Our state specifically forbids "late fees" ?? unless they are "part of the rent"??

Which means you have to be creative. We put Rent of $xx is due on or before the 1st day of the month. If paid after the 1st, rent is $yy, after the 5th, rent is $zz, etc.

It may pay to have a potential lease looked over by a real estate attorney.

I also have a small self storage/warehouse property (because business with the residential went so well). I wrote my own lease for that and the attorney I had at closing (I didn't use a realtor) didn't change a thing except to add line numbers.

I had the occasion to see a competitors lease for a much larger property, and it was a joke that looked like a pissed off middle school student wrote it.

The lease should also be a work in progress, modified any time you find something else that you feel needs to be in there. We had one tenant that asked about an early termination fee. We didn't have one, so we wrote one in....and 5 months later, she terminated early...and paid the fee!

 

[Dennis H]

Well, you guys have at it. Not my cup of tea. I can't even stand my habits, let alone someone renting my property. Three streams should provide all the income ever needed. I chose financial security by other means. No guarantees of course. My phone does not ring with bullshit plumbing calls in the wee hours. A friend is a landlord. Not everyone can or should be a homeowner. Landlords are good. You have my respect. Time is valuable.

 

[Cranky]

I personally would never go near residential, I started at 24 years old and built my first industrial building, I built spec buildings and either sold or leased them. Now I still have several industrial properties and a couple of shopping centers.
Believe me dealing with professional business people is much easier, I know a few people with residential properties and you couldn't give them to me.
I am 56 now and was able to retire before I turned 50 and my biggest problem is what to do with all the cash, it's a curse i tell ya lol.

I clicked on the disagree button because like having too much horsepower, having too much cash is the same. There's no such thing!!

 

[HT413]

How about some memorable stories for our friend? Ya know, help him decide if landlording is for him.

I’ll start.

Few years back a tenant plugged the 2nd floor toilet... and didn’t tell me the toilet needed repair so was constantly running. Well of course it overflowed, dripped down into the diningroom and wiped out the carpet. So here I am replacing wet carpet with a nice laminate floor... on the morning of Christmas Eve, because they have company coming and I’m a nice guy.

 

[NJRR]

Being a landlord is a business, much like any other. Your tenants are your customers, your property is your inventory. The pros are that you get to keep the inventory that you are "selling", your customers (tenants) ultimately pay the cost and after many years you have a valuable asset that is usually worth more than you paid for it and that generates income. I have rental properties of many different types; residential, commercial and vacation/seasonal. Over the course of 30+ years, I have had good tenants and bad tenants. It's part of the game. If you are just getting started out, it's imperative that you are handy and be able to do minor repairs yourself or else hiring professionals will eat up your profit. You have to do your due diligence on the price of the property, expenses, taxes, and of course the rental market in that area. You must take into consideration having vacancies with the subsequent loss of income. If you are in the black with all of that and you have the stomach for dealing with people, it could be a good source of income. The beauty is that it's not a full time job unless you own so much property that it becomes your full time job. And down the road it becomes a source of retirement income and something that can be passed down to your kids and bring them income. It's not for everybody, but then again, nothing is.

 

[monaco66coupe]

Having sold Homes for so many years I can't count how many people ask me to help them get a rental house, easy money they said. Then I tell them a story:
Back in 2001 ,November something,It was 8:00 A.M, and I was just making a cup of coffee. I sat down and turned on the tube. I then saw a house resembling mine on the screen with yellow tape around it. Then my phone rang. it was the Police, then all three radio stations. Apparently my nice tenant had been stalked by an Ex Husband, He hunted her at her Job, and everywhere else.

he finally found her at my house. He Murdered her at around 6:30 A.M in my House. Afterwards, I had to clean up. I had to deal with her belongings,her car,her family.
So I tell them: until you have experienced a Murder in your rental House, you are not an experienced landlord.
The cops knew the Guy, and said he apparently has fled back to Mexico. They are still waiting for him to come back.

 

[HT413]

Having sold Homes for so many years I can't count how many people ask me to help them get a rental house, easy money they said. Then I tell them a story:
Back in 2001 ,November something,It was 8:00 A.M, and I was just making a cup of coffee. I sat down and turned on the tube. I then saw a house resembling mine on the screen with yellow tape around it. Then my phone rang. it was the Police, then all three radio stations. Apparently my nice tenant had been stalked by an Ex Husband, He hunted her at her Job, and everywhere else.

he finally found her at my house. He Murdered her at around 6:30 A.M in my House. Afterwards, I had to clean up. I had to deal with her belongings,her car,her family.
So I tell them: until you have experienced a Murder in your rental House, you are not an experienced landlord.
The cops knew the Guy, and said he apparently has fled back to Mexico. They are still waiting for him to come back.

And here I was going to tell the story of when I had to unplug the sewer main that their child had plugged by flushing his brother’s t-shirt down the toilet. When it finally let go, I was covered in **** and toilet paper... the plug was in the basement and the whole stack was filled.

But yours takes the prize.

 

[YY1]

Nope- that would be a pro plumber call at our convenience and the bill added to the rent.

 

[YY1]

I'll add the we could deduct it as a repair expense, but sometimes folks need to be a bit uncomfortable and accountable for their actions.

That way we also get out payback up front instead of waiting on a tax credit.

 

[440+6]

I clicked on the disagree button because like having too much horsepower, having too much cash is the same. There's no such thing!!

Guess you don't get sarcasm, I was joking, hence the "lol" at the end of the sentence.
Don't think that's a reason to disagree with someone, or maybe you just don't get it.

 

[Cranky]

Guess you don't get sarcasm, I was joking, hence the "lol" at the end of the sentence.
Don't think that's a reason to disagree with someone, or maybe you just don't get it.

I guess you didn't notice the grin at the end of my statement? Seems to be you didn't get my sarcasm.....? Truce?

 

[Timmayy]

I got a call at work that my rental was on fire back in 2014. Yup, tenant flicked a cigarette butt and it lodged under a shingle. I ran over there. Thank god the fire dept was just a few blocks away. They kept the damage low. That was a fun experience. Dealing with the repairs wasn't that bad. It was dealing with the insurance company that sucked. After 6 months of waiting for my money I called my state rep. They made a nasty call to the insurance adjuster and was told I would have my check within a day or two.

 

[YY1]

No smoking in ours, and it's cause for eviction and loss of deposit as stated in the lease.

 

[Cranky]

No smoking in ours, and it's cause for eviction and loss of deposit as stated in the lease.

Oh man....when we had to put my mother in law into assisted living, she was smoking (more like burning) 4 packs a day!! When we took the pics off the wall, it showed the true color of the walls. I thought they were light yellow but they were actually white. It was horrible in that house. My dad smoked up until his heart attack and I ended up with his Dakota. It took a long time to get the smell out of it....

 

[Cranky]

I got a call at work that my rental was on fire back in 2014. Yup, tenant flicked a cigarette butt and it lodged under a shingle. I ran over there. Thank god the fire dept was just a few blocks away. They kept the damage low. That was a fun experience. Dealing with the repairs wasn't that bad. It was dealing with the insurance company that sucked. After 6 months of waiting for my money I called my state rep. They made a nasty call to the insurance adjuster and was told I would have my check within a day or two.

Had a similar experience with a minor fender bender but it damaged the front fender, grille, bumper and core support. Not even my fault and the guy that hit me was insured by the same company. After many weeks of calls to the company, a receptionist gave me a name and number to call with the company headquarters. I got a call back that day from claims demanding me to tell them where I got that number from. I just laughed. They still shorted me money from the lowest estimate and told me I could fix it myself and still pocket a few bucks. That happened in 77 and I still bad mouth that company.

 

[super-bee_ski]

I have been selling for 25 years as a realtor, and have been a landlord for 22 years.
my take is there are only two ways to make money on rentals. By the month,or by the Decade. Some people like to own cheap houses and make as much as possible by the month, and take their lumps when they come across the occasional deadbeat.
others up the Home price, buy the higher quality home,and also get the better tenant. They tend to be less trouble, and they pay your mortgage down while appreciation pushes the long term value up. it isn't for everyone, but if you have a strong constitution it can be good business. Hiring a Manager cuts into the cash flow,and a large percentage of them are Incompetent, which is why they are property managers, not full time Real estate Salespeople.
Even after 25 years I learn something new every day. Just a tip for the other
Landlords here:
if you have a tenant that is a slow payer verging on late beyond 30 days and you get a hint they are considering bankruptcy, be aware. Even if you have filed for eviction and gotten permission to take back the property, if the tenant files for Bankruptcy the eviction is delayed until the Tenant is out of bankruptcy.
This could be 6-8 months, and they can occupy your home and not pay a dime in rent. Federal law treats A lease the same as a Mortgage where filing for Bankruptcy stops a foreclosure. The only difference is the tenant rights to occupy end at the end of the lease. I have a friend going through this right now.
And any Bankruptcy lawyer that assists a Tenant in this embezzlement from a Homeowner has no ethics or Integrity.

Ha Ha!
What can I say?

-Well:
It WORKS for us
All 4 homes are Paid for.
We find the ""Write-offs" work well for us
I do most everything myself
We have "American Home Shield" for major appliances etc.
Even that is a deductible!
I rent to Government, D.O.D or Active duty personnel
Yup, we have had a "bad one or two" but I go by one saying: "Anything can be fixed"
So, it WORKS for us.
Sorry you have experienced so much Hardship
Of course, we have had a renter family that stayed for 10 years
Took 5 months to get the house "ready again" and about $14,000
Again, deductions....
Guess what?
Every year the houses are rented, they WERE making the payments (mortgage)
Now, all are paid for.

And no, I have NEVER used a Prop Manager

 

[super-bee_ski]

And yes,
Monaco66coupe is correct, by renting repeatedly "month to month" the tenant can not "SQUAT" for whatever period before the home is reclaimed....slow courts in CA protect the deadbeat renter NOT the Landlord/homeowner