Potential renter for our sticks & bricks - RV-Dreams Community Forum

Racerguy · RV-Dreams Family Member

Potential renter for our sticks & bricks

WestWardHo · RV-Dreams Family Member

I floated a balloon on Craigslist about selling or leasing our home. For tax reasons, we got the $8,000 tax credit when we bought our home so can not close before June 1 which I stated. Need to ck the papers to see if we must occupy. Had a legitimate sounding reply from a couple who lost their home & sold their business due to the economy. He is a railroad employee currently. They are interested in leasing for two years with a possible option to buy. Of course we would check them out thoroughly and have an RE attorney do the lease. Advice, thoughts, concerns? Ive read we would depreciate the home while renting but may want to come back to it, tax implications? We would want to establish residency in SD or Texas. We are really nervous about renting our home but this is a very good option for us. We don't need sale $ from home if we rent. Property here has been appreciating this year very quickly and significantly. Thanks, Sherry

GENECOP · RV-Dreams Family Member

Sherry we will be doing the same thing, make sure you have someone on Call to deal with issues as they come up. Homes require ongoing maintennance there should be one person you or your tennent calls for any and all problems, this management type person will call and facilitate the necessary trades , Plumber , Electrician, Etc....Also I would include in the lease all landscaping, Don't leave the basic Cut, Trim, Blow to the tennent, you want to make sure the property always looks good, your neighbors will not appreciate if your tennents neglect the property. Trust your instincts, there is nothing worste than a non paying dead beat tennent, if you get a bad feeling from them dont do the deal, Do Not Let your desire to rent cloud your judgement. Lastly a good stiff lease that puts any legal fees that might be incurred to evict them on them......if they don't pay you should not have to foot the bill to get them out....Good luck....

WestWardHo · RV-Dreams Family Member

Really great advice Gene, thanks!
We do have someone/friend/neighbor to property manage but your landscaper & stiff lease ideas are brilliant.

Keep them coming folks.

Lucky Mike · RV-Dreams Family Member

Another Suggestion......I dont know how far from the medical center you are but if you have a friend that works there.......there bulletin board has a lot of job secure.....doctors, nurses and Techs.looking at it and a rental with option to buy would probably generate some quick interest.....

Jack Mayer · RV-Dreams Family Member

I would be reluctant to use a friend for property management. I would use a professional property management company to do it. It will be worth the expense, IMO.

WestWardHo · RV-Dreams Family Member

Mike, that's a great idea. Medical center 5 minutes away. Operations mgr. is a friend and neighbor.

Jack, I ALWAYS trust your advice, but am hesitating this time as we would pay this friend as we would a management company. We know his executive management skills dealing with the public well, but he literally walks by our house every day while walking the dog. Our next door neighbor and friend is a retired cop he would observe from the back and side. Again, I trust your advice so fill me in here if i'm missing an important point.also professional management co's must charge sales tax here.

Keep advising and suggesting you great people.

What happens if we rent and depreciate it then return to it as our home?

K & E · RV-Dreams Family Member

When we had our house for sale in 2010, we had a similar offer. It was a couple who had moved to our area from out of state and opened their own business. They did not qualify for a mortgage because their business was too new. They seemed very above board and looked at the house twice and were willing to lease to own with a sizeable down payment. We were very tempted to do it, but we had a mortgage. When I checked with our mortgage company, they said if we leased it and they found out, our mortgage would immediately be due in full. No leasing allowed per our mortgage. We waited and were able to sell a few months later.

GENECOP · RV-Dreams Family Member

Security deposit is to ensure that your home is returned in the same condition. Always assume you will have to paint and clean upon taking possession back. The only way your property will depreciate is due to market conditions (nothing to do with tennent) or damage by tennent, (covered by security).if pets are part of the family, additional security should be required. Smokers should not be OK......IMO.

WestWardHo · RV-Dreams Family Member

K&E, OMG, I never thought of checking with our lender thanks! We'll call them.

RacerGuy, our friend ran a B& B for 7 years and managed a major hotel for a chain (name unmentioned). He has prior executive business experience with a national name corporation, not sure if the are versed in this specific tenant issues but would contact us who would contact our retained RE Attu (with whom we've had prior experience). Really good suggestion tho' ya'all should know that we haven't proposed this to our friend but we're pretty sure the extra income would be of interest.

GENECOP · RV-Dreams Family Member

You might want to think twice about notifying your lender, you also need to amend your homeowners insurance.......

Terry and Jo · RV-Dreams Family Member

And get a BIG security deposit. You would never believe what all renters will remove from a house if they take a mind to, especially if they see that they've done enough damage to know that they would never get the security deposit back.

Back many, many moons ago, I rented a small house that we had in a small town to the local school's janitor. Before he left town, he stole the new storm door and sold it to someone. Good thing we didn't have ceiling fans and appliances included with the house. Those would have likely been taken as well.

Terry

WestWardHo · RV-Dreams Family Member

Scary stuff, Terry. Stories like this just make me want to sell and be done. Gene we will change insurance.
An aside on property management companies. My step brother used the 'best' in the area to rent his house. Their lease said renters maintain trees & shrubs and landscape. A tree caused damage to house and property management paid the bill and deducted it from rent, wouldn't enforce the lease.
They never inspected the inside of the home upon renewal.

Thanks for all the advice!

Jack Mayer · RV-Dreams Family Member

It might work out with your friend, as long as he has the personality to enforce rules and keep an eye on things. In general I feel putting this burden on a friend is too much, even if they are paid. This is a JOB, and requires job skills in tenant management. But perhaps it will work. Hopefully you get a good tenant if you decide to go ahead. There are still good ones out there. Your biggest issue may be your lender. These days they are REALLY gun-shy of anything.....

WestWardHo · RV-Dreams Family Member

Thanks Jack, that makes me feel better. We will check with our lender today. Had another surgery to get out of the way. Things are heating up! We have a couple seriously interested in buying who are flying in next week AND a couple interested in leasing for 5 years. We'll know more next week but it has been interesting so far, we have only had serious inquiries. The potential leasers are known by friends and recommended. The purchasers are interested in buying furnished. Both options have great benefits for us! Hope we have that tough decision to make! Of course, nothing may come of these two at all.

Lucky Mike · RV-Dreams Family Member

Im hoping all goes well for you Sherry........I like it When things are looking up!!!!!!!!!!!

WestWardHo · RV-Dreams Family Member

Thanks Lucky, weren't you supposed to get "released" about now?

PIEERE · RV-Dreams Family Member

LM is probably stuck in a snowbank now or he is taking skiing lessons!!! LOL!!! Sorry Mike I couldn't resist.

WestWardHo · RV-Dreams Family Member

This is a bit of a long story so be forewarned.

Who hoo, I know I shouldn't be celebrating yet as nothing is final (but unfortunately as a former sales person I have to confess I've always "counted my chickens" against all advice ). All original interested parties fell by the wayside but we have a "live one" now. About 5 weeks ago I went to a weight watchers meeting with a neighbor friend. A nice woman who used to be my friend's neighbor joined us and we were chatting. She had missed this neighborhood as they had lived here several years. Her husband had been transferred out of town but she and the kids hated it so they moved back. At the time I offered to sell her our home but she said they wanted to rent for 5 years then move track to the Carolinas.

Jesse and I talked about it later and finally realized that at this time we would rather rent than sell - our exit plan. my friend couldn't remember the lady's last name but we knew she was teaching at the local high school. I was anxious to talk with her. Went back to WW in two weeks hoping to catch her. No dice but left a card with the lady who registers attendants with a note to call. Looked up high school's website and called school. Left a message with the office. No response. Went back to WW 3 more times (hey it's good for name anyway!) still no dice. Went back to HS website and found her last name and email addresee; so I sent an email. No response. Last Friday, I found phoned extensions on the website so I called but wrong extension was listed, but the teacher who answered the phone gave me the correct extension So I left a message. part of my message was I hoped she didn't think I was stalking her!

She called early this morning while I was working out at the gym. She is VERY interested, likes the rental amount, loves the neighborhood, house size works, her lease is up June 1 and we plan to leave May 10th for our first work camping job....they are coming this weekend to view But it feels good to both of us so far.

Talked to mortgage company, no problem renting home. Have to find out today how our insurance will be affected and plan for that. Now if they only want to buy some tv's and furniture! Back to packing up! And our friend i mentioned in an earlier post has agreed to managing house for us.

Keep your fingers (toes, legs) crossed!

Sherry

MarkS · RV-Dreams Family Member

Jack Mayer wrote:
I would be reluctant to use a friend for property management. I would use a professional property management company to do it. It will be worth the expense, IMO.

I will second this motion and print it in large bold print while screaming it from the rooftops. There are a few times in life where it is safe to use the words never and absolute. Renting a house is one of them.

I rented a home in Florida while having a friend act as manager. It worked OK but in the end we wished we would have used an agency. Now we have our house in Mesa Arizona with an agency and wouldn't consider doing it any other way, ever. A carefully chosen agency is worth their weight in gold. They have the experience and resources to handle any problem that pops up.

My agency uses the MLS system to advertise when it is empty. As a result we have never stood empty more than 60 days. They have lawyers for times when scoundrels are needed. They have the ability to qualify potential renters with credit checks and back ground checks. They know how to evict if that becomes necessary. They send me monthly and year end statements so I don't have to think when it comes time to do taxes. And, they charge me 8% which is a pentance compared to the cost for Tums and Excedrin while trying to do it any other way.

That being said, the house is for sale if any of you are looking to settle in Mesa. 3 BR, gated community. It was a model so it has all the options including landscaping and the back yard has wiring for a hot tub. I'm not looking to make a killing, just a down payment on a house with wheels.

Jack Mayer · RV-Dreams Family Member

In many states it is almost impossible to get a deadbeat renter out of the house. You usually have to go to court. The benefit of a GOOD agency is that they vet the renter very well. It is in their interests to do so. They also act FAST to get them out when required, and know all the ins and outs of the legal system.