All Forum Posts by: Rene Brown

It is not worth holding as a rental. Your expenses will far exceed your rental income based on your numbers. Additionally the damage tenants do will require work to repair when you do finally decide to sell. 

It will cost you money above your rental income to hold this property and will be more headaches than you expect. 

Keep trying to sell, drop your price if necessary.

Nervous about giving out the MLS info? Why?

When you are trying to sell a house, you should want to advertise it in as many locations as possible. I recently sold a home and posted it here, Facebook, Zillow, Trulia, Craigslist, etc.I received many calls from people on this site interested in buying the home.

Also why don't you give us the numbers so we can help evaluate if it would make a good rental? Many inexperienced investors think that the numbers on their properties are good but forget some expenses and costs. Just as an example you said the house needs "lots of updates". Putting a new roof on a house could kill all of your profits for a year or more.

The market you are describing and the property that you described in your first post does not sound like it is a great place to invest. Many people turn their former primary residences into rentals and find out later that they were not good investments.

Rene - Since you're just starting out, I would recommend reading 'Landlording: A Handymanual for Scrupulous Landlords and Landladies Who Do It Themselves'.  This is a tome, but it's worth the read, and answered many of my questions when I started out.

Biggest key is screening your potential tenants, and filtering out all the crew with bad records as early as possible.  Your tenants will be 95% of your success or failure.  Review their eviction histories, background records, credit histories.  Check out the state of their current place if possible.  The shape it's in now will be the shape your property eventually.

Have you given thought to who is going to manage the property - as in, who will take the phone call when something that is both important and urgent (say, the furnace in December) breaks?  Does that 'needs lots of updates' extend to, say, the state of the roof or the water heater?  This might increase the frequency or urgency of those calls, so might consider updating a few things.  Fresh paint and new carpet can go a long way for both potential renters and potential buyers of course.

You could be right on the rent qualifications, I have no clue of your market.....but rather than assume there will be no tenants, try scrolling around in Zillow in your area for a bit *as a renter*, and checking out what's currently for rent for a 3/2, if anything.  This should give you some idea of what properties can really rent for in your market.  I have not found that Zillow's 'monthly rental cost' data on a single house to be too helpful or on point, as a warning.  

Best of luck.  Yes, you can do this.  Keep asking questions and reading.  Personal experience is a great teacher but a very, very expensive one.

@Rene Brown I'm sorry; I didn't realize you were staying in the area. In that case, I would definitely recommending educating yourself and doing it yourself.

1. A local attorney should be able to provide you with a decent lease. It won't be perfect but it will be legally binding and should cover 90% of what you would expect.  If the attorney is worth their salt, they will spend some time going over it with you. Take notes and research what you don't understand.

2. Learn how to screen applicants. Proper screening will cut the risk of future headaches by 80%.

3. Set policies, put them in writing, commit them to memory, and do not waive them:

• All adults must pass your screening;
• Nobody moves in without proof utility accounts are established, rent and deposit are paid in full;
• Rent is due on or before the 1st, period.
• Late fee is applied on day X, period.
• 3-day Notice to Pay or Quit is filed on day X, period.
• Eviction filing (forcible entry and detainer) is filed on day X, period.
• Be prepared to handle lease violations (unauthorized pets or tenants, vehicle parked on lawn, not mowing grass, etc.)

A little education and preparation will go a long way. Try to find other people in your area that manage rentals and ask them for help. And you can always call on us to help out when able!

Are you advertising on the MLS? May we have the address to look it up on our computers? I would like to see the subject property

Nervous about giving out the MLS info? Why?

When you are trying to sell a house, you should want to advertise it in as many locations as possible. I recently sold a home and posted it here, Facebook, Zillow, Trulia, Craigslist, etc.I received many calls from people on this site interested in buying the home.

Also why don't you give us the numbers so we can help evaluate if it would make a good rental? Many inexperienced investors think that the numbers on their properties are good but forget some expenses and costs. Just as an example you said the house needs "lots of updates". Putting a new roof on a house could kill all of your profits for a year or more.

The market you are describing and the property that you described in your first post does not sound like it is a great place to invest. Many people turn their former primary residences into rentals and find out later that they were not good investments.

The book I recommend is Every Landlord's Legal Guide by NOLO. It's written by attorneys but is very easy to read and full of practical advice, sample forms, and specific laws for each state. I've never seen a better book for someone just starting out.

I'm sure there's someone that handles property management in a town that size, though I can't vouch for the quality. Have you talked to the real estate offices to see if they can recommend anyone?

Before you even consider being a landlord, you need to run the numbers on the house. 

How much did you pay? How much did you put down? How much is your mortgage payment? How much are your taxes? How much is your insurance? How much are your other expenses? What kind of rents would you be able to get in your market for the home? Will you get any appreciation from the home?

Even if this home used to be your primary residence, you need to act like it is an investment at this point. If the numbers do not make sense for renting, then you need to sell it. 

If the home needs lots of updates like you said, that could be the reason it is not selling for the price you want. Do you have a link to the MLS listing?