Putting our house up for rent

[blessed3x]

Any advice? :bigear:

 

It has been on the market for 6 months now and is not selling. Our realtor said we really needed to lower it about $20k to sell, but we cannot afford to do that. Keep in mind, this is AFTER we hired and paid for an appraiser to get a good market value to price it at, and priced it below that. :confused:

 

So, now that we are going into winter, we don't want to have it sitting empty when we are 12 hours away in another state. We have *great* neighbors who have kept an eye on it and called us when little things have happened (realtors leaving lights on, phone company digging trenches in our front yard, lightening hitting a tree in the back yard :toetap05:) but enough is enough.

 

We have found a property manager and have the paperwork.

If anyone here has had this experience and would care to share some insight, I welcome it. :bigear:

 

The property management company uses a standard lease which is very detailed. We are specifying no pets, one family....

but if you have other items that will help, I appreciate it.

 

Thanks, Hive.

[blessed3x]

Any one?

 

I know some of you manage rental properties. :)

[Trilliums]

If you have an experienced property manager, things will hopefully go well for you.

 

We have had a few bumps on the way with our property manager, but I do have to say she has found great tenants. She has very good instinct on who makes good renters. Some of her advice we questioned, but she backed it up with sound reasoning and so far all has gone well (Keeping fingers crossed!).

 

Be sure you are clear about flexibility on rent or utilities if applicable. We always get people who ask for a reduction one way or another and sometimes the manager will negotiate that without going through all the details with us.

 

Also, think about what you want to do with the property long term. We are now wondering what in the heck to do with our house. We had hoped it would be a good college fund for the kids, but prices haven't rebounded yet. So, in that sense you surely cannot predict, but at least talking through all the possible scenarios might help prevent surprises later on.

[TranquilMind]

Any advice? :bigear:

 

It has been on the market for 6 months now and is not selling. Our realtor said we really needed to lower it about $20k to sell, but we cannot afford to do that. Keep in mind, this is AFTER we hired and paid for an appraiser to get a good market value to price it at, and priced it below that. :confused:

 

So, now that we are going into winter, we don't want to have it sitting empty when we are 12 hours away in another state. We have *great* neighbors who have kept an eye on it and called us when little things have happened (realtors leaving lights on, phone company digging trenches in our front yard, lightening hitting a tree in the back yard :toetap05:) but enough is enough.

 

We have found a property manager and have the paperwork.

If anyone here has had this experience and would care to share some insight, I welcome it. :bigear:

 

The property management company uses a standard lease which is very detailed. We are specifying no pets, one family....

but if you have other items that will help, I appreciate it.

 

Thanks, Hive.

 

There is just so much to cover, I hardly know where to begin.

 

How much is the property management fee? Most landlords (I've been one almost 12 years) will not use PM's because it eliminates the profit/cushion. Get the exact amount in writing.

 

Also know, that the PM is going to charge you high prices for every little thing that is done. Need a plumber? You could find one for $250, but PM will find that same guy and then charge you another $200 for a "fee" on top of his fee.

 

There are a few good PMs (research yours for reviews HEAVILY) but most just put any warm body in there and may not abide by your requirements, like no pets or smokers. Make sure that all reviewers, and most importantly, landlords who happen to own out-of-area properties - recommend this PM. Have an attorney go over the paperwork for you, even if it is just a friend. The Agreement will be quite biased in the PM's favor.

 

If you are going to do this, require final approval (if you can get it). Have the PM run the applicants by you. You want someone with good credit, no criminal history, good, stable employment, and sufficient income (at least 3X rental amount or more, if has debt). You want verification that there are NO smokers and NO pets, both of which will cause you hefty cleaning and repair fees when they are out.

 

I'd rather sell, even for a lower amount, than be a long distance landlord.

[Jpoy85]

can you find another realtor who would work with you to help you get it sold?

 

My grandmas house sat and sat (over a year) with very few showings. The realtor wasnt doing her job at all. My grandma passed away and my dad found a new realtor and it sold within 3mo. We didnt have to lower the price. The realtor just knew what they were doing to get it sold!.

 

Renting can be harder than trying to sell.

[NotSoObvious]

We have great neighbors and use a wonderful management company (the owner is also a neighbor). We have fantastic renters and it's been a good experience so far!

 

I think the thing that was initially hard for us was when the tenants put in a work order, we were "notified" (not asked) that the management company was going to have it fixed, then it was docked out of our check. The first little thing was a toilet that was running (that wasn't running a month prior when we lived there). $200. $200! It was probably a $2 piece that my husband could have fixed in ten minutes!

So that was hard to swallow. Thankfully it's only been a few things here and there and I am GLAD we have picky renters because our house is only 6 years old, so I really want them to let us know when things aren't working properly. I'd rather have them report every little thing than let things fall to pieces.

 

Our renters also KNOW that we have good neighbors and that we are close to them. That adds a layer of accountability that is priceless.

 

Knock on wood, it has been a good experience. It was hard to give up control of the house we built :( but I'm so glad that someone else takes care of the headaches and we just get a check. :)

 

It sounds like you have things figured out! Just make sure the management company is good and knows that your neighbors are watching. Make sure your neighbors have the management company's phone number!

[blessed3x]

There is just so much to cover, I hardly know where to begin.

 

How much is the property management fee? Most landlords (I've been one almost 12 years) will not use PM's because it eliminates the profit/cushion. Get the exact amount in writing.

 

Also know, that the PM is going to charge you high prices for every little thing that is done. Need a plumber? You could find one for $250, but PM will find that same guy and then charge you another $200 for a "fee" on top of his fee.

 

There are a few good PMs (research yours for reviews HEAVILY) but most just put any warm body in there and may not abide by your requirements, like no pets or smokers. Make sure that all reviewers, and most importantly, landlords who happen to own out-of-area properties - recommend this PM. Have an attorney go over the paperwork for you, even if it is just a friend. The Agreement will be quite biased in the PM's favor.

 

If you are going to do this, require final approval (if you can get it). Have the PM run the applicants by you. You want someone with good credit, no criminal history, good, stable employment, and sufficient income (at least 3X rental amount or more, if has debt). You want verification that there are NO smokers and NO pets, both of which will cause you hefty cleaning and repair fees when they are out.

 

I'd rather sell, even for a lower amount, than be a long distance landlord.

 

 

Thanks for this. :)

 

It is a small town, and there are only 2 PM. I don't have too many options.

 

We asked to review everything for whoever they found, but I will make sure it is in writing. Thanks.

I had not thought about asking about extra fees for repairs.. thanks for the heads up.

The house will rent for $1400, his portion is 13% ($182 per month). My father owns a real estate company in AL. I emailed the paperwork to him to review for me. :)

 

We would rather sell, but cannot go that low. We hope to sell in 1-2 years, or to find a renter who will want to buy it. Asking too much, right?

[blessed3x]

can you find another realtor who would work with you to help you get it sold?

 

My grandmas house sat and sat (over a year) with very few showings. The realtor wasnt doing her job at all. My grandma passed away and my dad found a new realtor and it sold within 3mo. We didnt have to lower the price. The realtor just knew what they were doing to get it sold!.

 

Renting can be harder than trying to sell.

 

:iagree: but we have a great realtor. He is one of the best in town. Most people say that if it can be sold, get him. Ours just is not moving unless we lower it, but we don't have that kind of cash to put into it.

[blessed3x]

We have great neighbors and use a wonderful management company (the owner is also a neighbor). We have fantastic renters and it's been a good experience so far!

 

I think the thing that was initially hard for us was when the tenants put in a work order, we were "notified" (not asked) that the management company was going to have it fixed, then it was docked out of our check. The first little thing was a toilet that was running (that wasn't running a month prior when we lived there). $200. $200! It was probably a $2 piece that my husband could have fixed in ten minutes!

So that was hard to swallow. Thankfully it's only been a few things here and there and I am GLAD we have picky renters because our house is only 6 years old, so I really want them to let us know when things aren't working properly. I'd rather have them report every little thing than let things fall to pieces.

 

Our renters also KNOW that we have good neighbors and that we are close to them. That adds a layer of accountability that is priceless.

 

Knock on wood, it has been a good experience. It was hard to give up control of the house we built :( but I'm so glad that someone else takes care of the headaches and we just get a check. :)

 

It sounds like you have things figured out! Just make sure the management company is good and knows that your neighbors are watching. Make sure your neighbors have the management company's phone number!

 

Great idea. Thanks!!

[Trilliums]

Thanks for this. :)

 

It is a small town, and there are only 2 PM. I don't have too many options.

 

We asked to review everything for whoever they found, but I will make sure it is in writing. Thanks.

I had not thought about asking about extra fees for repairs.. thanks for the heads up.

The house will rent for $1400, his portion is 13% ($182 per month). My father owns a real estate company in AL. I emailed the paperwork to him to review for me. :)

 

We would rather sell, but cannot go that low. We hope to sell in 1-2 years, or to find a renter who will want to buy it. Asking too much, right?

 

When we looked into it, the ranges were 8-10% in Southern CA. I did not encounter any property managers who charge over 10%.

[TranquilMind]

Thanks for this. :)

 

It is a small town, and there are only 2 PM. I don't have too many options.

 

We asked to review everything for whoever they found, but I will make sure it is in writing. Thanks.

I had not thought about asking about extra fees for repairs.. thanks for the heads up.

The house will rent for $1400, his portion is 13% ($182 per month). My father owns a real estate company in AL. I emailed the paperwork to him to review for me. :)

 

We would rather sell, but cannot go that low. We hope to sell in 1-2 years, or to find a renter who will want to buy it. Asking too much, right?

 

Whoa! 10% is standard. Why the 13%?

[Remudamom]

My advice is don't. We are a mile away from our rental house and the renters have destroyed it.

[TranquilMind]

My advice is don't. We are a mile away from our rental house and the renters have destroyed it.

 

I'm sorry.

 

Yes, unless you are very skilled at screening tenants, the pros are going to get by your screening.

 

Also, it is totally different renting out your personal home. No one will take care of it as you will. If it is "just a rental" to which you have no personal attachment, it isn't as hard when they damage it.

 

Minimum of two previous landlord recommendations are required here and they had better be good.

[missmoe]

There is just so much to cover, I hardly know where to begin.

 

How much is the property management fee? Most landlords (I've been one almost 12 years) will not use PM's because it eliminates the profit/cushion. Get the exact amount in writing.

 

Also know, that the PM is going to charge you high prices for every little thing that is done. Need a plumber? You could find one for $250, but PM will find that same guy and then charge you another $200 for a "fee" on top of his fee.

 

There are a few good PMs (research yours for reviews HEAVILY) but most just put any warm body in there and may not abide by your requirements, like no pets or smokers. Make sure that all reviewers, and most importantly, landlords who happen to own out-of-area properties - recommend this PM. Have an attorney go over the paperwork for you, even if it is just a friend. The Agreement will be quite biased in the PM's favor.

 

If you are going to do this, require final approval (if you can get it). Have the PM run the applicants by you. You want someone with good credit, no criminal history, good, stable employment, and sufficient income (at least 3X rental amount or more, if has debt). You want verification that there are NO smokers and NO pets, both of which will cause you hefty cleaning and repair fees when they are out.

I've had the opposite experience with PM charging me for things. Often, our PM is able to get prices I could never find. They know and have good relationships with plumbers, handymen, painters, ect and therefore are able to get good prices for services.

 

No pets is a good thing to state, but I have found it almost impossible to find people to rent who don't have some kind of pet. I've learned to make sure the pet matches the property. A property without a yard doesn't need a large dog, but a small dog or cat could be okay.

 

I've also never heard of a PM not giving you final say in who you rent to. The PM is working for you! Do make sure you understand how repairs are going to be handled. For our properties, we have an agreement that repairs under $100 are okay without our approval. We did change that at one point when we had a tenant that complained about everything! Then we let them know that we needed to provide approval for all repairs!

 

Renting when you live elsewhere is not ideal, but I understand that we do not live in ideal times! Our home sat empty for about 11 months before we rented it. One does what one needs to do!

[Dobela]

Can you talk to some of the other clients of the PM? Ask them what they like and don't like abomut working with him. Can you talk to renters and ask what their side of the experience was like?

 

As a renter we once had a horrible time with a PM. The owner was in another state and I honestly don't think he was being informed of all that was wrong. The repair men sent in by the PM were cheap, iffy workers who were always very condensending towards me. I hated dealing with them. When we moved out because the eaves were so rotten that animals were living in the attic, the PM didn't blink an eye.

 

Renting is not for the faint at heart. The PM is going to receive over $2000 this year for renting out the property. Then, when you do sell the house, because it has been a rental, you will have to pay property gains on the sale. I would check with an accountant. You may lose more renting it than you would by dropping the price by $20K.

[Kari C in SC]

If you are going to do this, require final approval (if you can get it). Have the PM run the applicants by you. You want someone with good credit, no criminal history, good, stable employment, and sufficient income (at least 3X rental amount or more, if has debt). You want verification that there are NO smokers and NO pets, both of which will cause you hefty cleaning and repair fees when they are out.

 

 

This is important. When we first moved out of state and rented our house - we hired a company to manage it. They put somebody that really was not qualified into our house. They would not share the financial info with us. I filed that in my NEVER AGAIN file. I want to see the application, background check, credit report! It is MY HOUSE and I want to know who is living in it.

 

Honestly... I have 5 rental houses now and have been doing this for 5 years. It can be a great investment... just be prepared that people are crazy. No matter how much you screen or how many questions you ask - people are crazy. Have a decent emergency cushion if you can. Things break. People break leases. People leave messes. The best thing I have done is built a good fund of $$$ so that when they call and say the refrigerator broke (3 broken appliances just this spring) - I just order a new one or call the repair guy and I don't stress.

[blessed3x]

Whoa! 10% is standard. Why the 13%?

 

The other company did charge 10%, but they also wanted 1/2 months rent for getting the renter.

This PM does not charge an up front fee, but does charge the 13% monthly.

[blessed3x]

Can you talk to some of the other clients of the PM? Ask them what they like and don't like abomut working with him. Can you talk to renters and ask what their side of the experience was like?

 

As a renter we once had a horrible time with a PM. The owner was in another state and I honestly don't think he was being informed of all that was wrong. The repair men sent in by the PM were cheap, iffy workers who were always very condensending towards me. I hated dealing with them. When we moved out because the eaves were so rotten that animals were living in the attic, the PM didn't blink an eye.

 

Renting is not for the faint at heart. The PM is going to receive over $2000 this year for renting out the property. Then, when you do sell the house, because it has been a rental, you will have to pay property gains on the sale. I would check with an accountant. You may lose more renting it than you would by dropping the price by $20K.

 

That is why dh wants to sell after 2 or so years. We would have to pay the tax if it was rented for 3 years. That is his understanding. Is it right? :001_huh:

[blessed3x]

I've had the opposite experience with PM charging me for things. Often, our PM is able to get prices I could never find. They know and have good relationships with plumbers, handymen, painters, ect and therefore are able to get good prices for services.

 

No pets is a good thing to state, but I have found it almost impossible to find people to rent who don't have some kind of pet. I've learned to make sure the pet matches the property. A property without a yard doesn't need a large dog, but a small dog or cat could be okay.

 

I've also never heard of a PM not giving you final say in who you rent to. The PM is working for you! Do make sure you understand how repairs are going to be handled. For our properties, we have an agreement that repairs under $100 are okay without our approval. We did change that at one point when we had a tenant that complained about everything! Then we let them know that we needed to provide approval for all repairs!

 

Renting when you live elsewhere is not ideal, but I understand that we do not live in ideal times! Our home sat empty for about 11 months before we rented it. One does what one needs to do!

 

Thanks for your input.

I did speak with him today and he prefers to give us final approval, so that is ok. It was not stated in any of the paperwork, but I am going to add it. :)

The repairs are in the paperwork. We have listed $250+ for approval. Less than that he can take care of.

If we were in a position to drop the price, we would do it to sell. But with 2 daughters in college the money is not there.

As you said, we do what we need to do. Right now, it is renting. Fortunately, I am not attached to this house. I liked it. It was home for 5 years. It was never our 'forever house', so it is ok.

[Dobela]

That is why dh wants to sell after 2 or so years. We would have to pay the tax if it was rented for 3 years. That is his understanding. Is it right? :001_huh:

Call an accountant and ask. My dad always wants to sell before the 2 years is upm if he is going to sell, because the 2 year mark is when the capital gains increases dramatically. You also need to talk to an accountant about how this will effect your taxes, how you will ned to file, what kind of records you will want to keep...

[southcarolinamom]

My DH and I were our own property managers with our rental house! (just two blocks away from our current home). Just a couple of suggestions to add onto the rental agreement:

 

"No indoor pets." As stated by other posters, it's almost impossible to find a family who doesn't have a pet of some sort. And if pets are brought into the home and stain the carpet, floors, do other damage, etc. the renters need to pay for the damage. That should be stipulated clearly in the renters agreement.

 

"Right of first refusal." ie if your house still remains on the for sale market, you are offering your tenants "first dibs" at buying the home. It kind of gives them a security blanket.

 

Good luck!

[TranquilMind]

The other company did charge 10%, but they also wanted 1/2 months rent for getting the renter.

This PM does not charge an up front fee, but does charge the 13% monthly.

 

Well, calculate out which will cost you more! I suspect that 1/2 month up front will be far cheaper, depending on how long they stay, of course. And you only want well-qualified applicants who will abide by their Lease terms.

[KatieJ]

Well, calculate out which will cost you more! I suspect that 1/2 month up front will be far cheaper, depending on how long they stay, of course. And you only want well-qualified applicants who will abide by their Lease terms.

 

We have been landlords for 20 some years and have had to pay a PM for almost 20 since we don't live near them anymore.

 

10% and one months rent is pretty standard.

 

1/2 months rerent fee is nice. I would ask if they charge you for advertising or if that is included in the rerent fee. Do they charge you for the prescreening things like application fees, credit checks, etc.

Will they send you the actual bill from a plumber or will they upcharge it and then bill you?

Cheaper PM fees usually means they are padding the bills somplace else.

Ask me how I know.:glare:

[scrappyhappymama]

There is just so much to cover, I hardly know where to begin.

 

How much is the property management fee? Most landlords (I've been one almost 12 years) will not use PM's because it eliminates the profit/cushion. Get the exact amount in writing.

 

Also know, that the PM is going to charge you high prices for every little thing that is done. Need a plumber? You could find one for $250, but PM will find that same guy and then charge you another $200 for a "fee" on top of his fee.

 

There are a few good PMs (research yours for reviews HEAVILY) but most just put any warm body in there and may not abide by your requirements, like no pets or smokers. Make sure that all reviewers, and most importantly, landlords who happen to own out-of-area properties - recommend this PM. Have an attorney go over the paperwork for you, even if it is just a friend. The Agreement will be quite biased in the PM's favor.

 

If you are going to do this, require final approval (if you can get it). Have the PM run the applicants by you. You want someone with good credit, no criminal history, good, stable employment, and sufficient income (at least 3X rental amount or more, if has debt). You want verification that there are NO smokers and NO pets, both of which will cause you hefty cleaning and repair fees when they are out.

 

I'd rather sell, even for a lower amount, than be a long distance landlord.

 

:iagree::iagree::iagree:

 

The house will rent for $1400, his portion is 13% ($182 per month).

 

We rent out our house without a property manager, because we could not afford the 10% a property manager would charge. 13% does seem high, but you'd have to run the numbers. Most of the 10% pm's also charge one month's rent to find a renter and initiate the lease.

 

Also, we've had similar experiences as TranquilMind listed above, so would rather manage the property ourselves if at all possible. Fortunately we live only about 2 1/2 hours from our home, so if something goes wrong, it's a pain, but we can go down & take care of it. Or so he told us. The first tenant caused a flood and ruined our parquet floor within the first week and tried to blame it on us and get us to pay $500 dry cleaning expenses for clothing in boxes that were water damaged. Sigh. She went on to run a "massage" business from the home. Yes, the quotes there mean what you think they mean.

 

Our second tenants supposedly had excellent references. They lived in our house for about a year and a half and they completely trashed it. They allowed one room to be used as a room-sized cat litter box/scratching post. When we pulled out the carpets, they were FULL of cat litter and urine. The wall of built-in shelves were ruined by deep cat scratches. The shades were all shredded by cat claws. This was just one room. All the others had similar ridiculous damage.

 

Our property manager was useless. I am sure there are some good ones out there, but ours we paid 10% a month, then had to pay him a month's rent again each time his loser tenants left, he up charged every repair and did nothing to help protect our property or check to make sure it wasn't being destroyed.

 

Now, instead of a property manager, I did all my own advertising and showing the house. My husband did all the prep on the house and does most of the repairs himself. We have a local friend who drives by the house every week or two and is available to go to the house if a repair emergency arises. We offered to pay him a small fee each month, but he refused, so we treat him to dinner when we're in town. We have neighbors who keep an eye out as well and will call us if necessary. They even did a repair for us once, just because he knew how. We're fortunate to have excellent tenants. I had to hold out through several questionable ones until the right folks came along. The whole process is stressful, but it's so much better to have tenants that we feel comfortable with in our home. Our tenant also pays us each month by electronic transfer, so we don't need a PM to collect rent. I was able to buy a state specific lease online. So far we haven't missed a PM at all.

 

So, other than my obvious bias against a PM, my best advice is to set up an electronic transfer for the rent. Check into a home warranty, especially if you have an older furnace or ac that might go out. Keep a savings fund to cover all other repairs as they come along. Be sure to have your tenants fill out a property condition form when they move in, so there is no dispute later about what is a pre-existing issue and what is damage they may have caused. Include a small deductible for repairs, to discourage them calling for every little small thing. Make a welcome basket when they first move in and try to cultivate a good relationship. We are pet owners, so we are sympathetic to renter's with pets. But rather than simply allowing or disallowing pets, we list the home as pets on a case by case basis. Then we can evaluate the situation, but don't automatically turn away potentially good tenants.

[blessed3x]

Where to start?

 

It has been 6 weeks and our house is still *not* rented. The communication is not great either.

There has been some layoffs in the area and he is telling us that is why there are not more showings. We have had 1 offer to rent but it was 1/2 of the rental price. :glare: We had another couple 'interested' but they had not even filled out an application. :001_huh:

It all seems strange to us.

 

So, now we are back at possibly taking the $20k loss and just putting it back on the market. What a nightmare.

 

Our other option is to try to move back if dh can transfer back to the area. Until then, life continues with double house payments. UGH.

 

I hope others have had more success.

[TranquilMind]

Where to start?

 

It has been 6 weeks and our house is still *not* rented. The communication is not great either.

There has been some layoffs in the area and he is telling us that is why there are not more showings. We have had 1 offer to rent but it was 1/2 of the rental price. :glare: We had another couple 'interested' but they had not even filled out an application. :001_huh:

It all seems strange to us.

 

So, now we are back at possibly taking the $20k loss and just putting it back on the market. What a nightmare.

 

Our other option is to try to move back if dh can transfer back to the area. Until then, life continues with double house payments. UGH.

 

I hope others have had more success.

 

Are you using a PM or a Realtor? You Do not want to use a Realtor to rent a house. They don't know how to screen tenants. They want to sell houses not rent them, though they will tell you they can do this, of course. Tenants don't make low offers to landlords directly; at least they don't to me, and even though our market is not that great, the rental market is really good right now.

 

Have you posted your own ad on Craigslist? (I guess you cannot if you are under contract to someone). If you screen well, you can minimize your showing time and get that house rented. Maybe 1 in 10 gets through my screening, and by then, I know I have a really good prospect.

[Kari C in SC]

I use http://www.postlets.com to advertise as well as Craigslist.

[blessed3x]

Are you using a PM or a Realtor? You Do not want to use a Realtor to rent a house. They don't know how to screen tenants. They want to sell houses not rent them, though they will tell you they can do this, of course. Tenants don't make low offers to landlords directly; at least they don't to me, and even though our market is not that great, the rental market is really good right now.

 

Have you posted your own ad on Craigslist? (I guess you cannot if you are under contract to someone). If you screen well, you can minimize your showing time and get that house rented. Maybe 1 in 10 gets through my screening, and by then, I know I have a really good prospect.

 

It is listed with a PM right now.

We do not want to take care of it ourselves since we are 10 hours away.

 

DH thinks he can get a job in the area again, so we may just try to move back and hope the market turns around in a few years so we can sell it and move on then.

 

Thanks for your input though. This has definitely been a learning experience.