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Thread: Sell or rent current home Reply to Thread
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Topic Review (Newest First)
02-16-2020 08:53 PM
Curmugeon I have owned 2 rentals for 15 years. Here is the suggestion from an actual landlord. ( DO NOT OWN A RENTAL ) The mood of this country is changing to socialism. Tenants hate your guts because you are the rich guy who is ripping them off by collecting rent. As an example, I rented to a family for 11 years. During that time, I raised the rent in two steps from $800 to $845 per month. The tenants were livid and accused me of trying to destroy them financially. The verbal abuse became so bad I ended their month to month lease. Better a vacancy than constant insults. As they were moving out, the tenants told me I was scum because all they could find for $845 a month was a 2 bedroom, rather than the 4 bedroom they had :-)
02-04-2020 05:38 PM
T.$.Racing
Quote:
Originally Posted by leadcounsel View Post
This is HORRIBLE advice.

First, it ignores reality.

Secondly, it suggests illegal possible FELONY level extortion. It's going to be hard to manage your property if you're in jail for a felony, and hiring a lawyer to defend you.

Third, a home owner stands to lose a LOT MORE in value than a car window. You break their car window, a $200 value, you might find $30,000 in damages to your rental house...

Bad renters really have a home owner by the sack. They hold essentially all the cards. All the homeowner can do is threaten eviction which will damage their credit. And some people just don't care, particularly if they have unexpected bad life events.
My personal experience has shown me otherwise. Thankfully, I learned from those that did make similar mistakes. Those lessons, along with the vetting I mentioned in my first post are what it hasn't come to that. The market I am in is also vast, so that helps when you're going to be choosy....

On the other hand. You fight fire with fire. "Real recognize real" as they say in the hood.
02-04-2020 03:33 PM
Freethinkin'Man
Quote:
Originally Posted by PurpleKitty View Post
section 8 tenants
*shudder...*
02-03-2020 03:32 PM
PurpleKitty The lady next door has rented for over 10 years to a parade of various section 8 tenants. ALL of them had major issues and did serious property damage, one brought a rat infestation, the feces were inches deep in the cupboards, I could see it when they threw out the cabinets. Not worth it, the neighbors will hate you, the tenant will hate you and think you "owe" them freebies, complain constantly, then cheat you on the rent because you wouldn't "let" them do this or that... not worth it. Sell.

She ended up renting to her daughter when the daughter moved back into town. The daughter has been fine.
02-03-2020 01:29 PM
SgtBooker44 I'm an owner. After working in the Sheriff's Civil Division I swore I would never be a landlord. During evictions I saw upwards of $70,000 in damage to rental properties done in the 6 days from when I posted the eviction notice to when I enforced the court ordered eviction. Holes in walls, torn out fixtures and even cement poured in sewer lines. No Thank You!
02-03-2020 01:29 PM
leadcounsel ^^^ This is the reality.

A landlord might make money for many years, but ONE bad renter can financially ruin you.

Imagine renting and breaking even for 29 years on a 30 year mortgage. Nearly clearing the payoff, and then your last renter turns it into a meth cook house, guts it, and it's condemned. You've now lost your entire asset and 3 decades of work and stress.
02-03-2020 12:34 PM
FalconsBravesHawks Being a landlord was the biggest pain I can possibly imagine. After I gave my last renter the landlords 60 day notice to vacate, keeping her entire 1300.00 deposit, we still were out thousands due to her keeping all her trash in the garage for months, and then the rat INFESTATION that followed. I couldn't even imagine at the time the damage that was done that could not be seen. Luckily this house was in a very good area and school system. We ended up clearing 130k, but I put a ton of money and hours and burning time off in order to complete most of the repairs myself. Even with a management company you could still run into some of this stuff.
02-03-2020 12:21 PM
AZ_HighCountry Based on what the OP has shared my original position stands: sell it. Also, look to a 1031 Exchange to keep the tax impact to a minimum.
02-03-2020 12:01 PM
leadcounsel
Quote:
Originally Posted by Mountain View Post
In middle school and HS I worked with a family friend part time helping him with his twenty rental houses.

I remember wading knee deep in garbage in some of his houses, I remember one house that had no doors as the tenants had burned the doors in the fireplace for heat. Downstairs we found a huge amount of stolen property from the television station that the guy worked at not to mention a dozen potted pot plants cut off and taken with them growing in the basement. All this after the people having lived there for three months without paying a dime in rent. Now multiply this time and time again year after year....

After a couple years of helping Ed with his rentals I determined that I would "never" consider getting into the rental game.

.
Yup, this became my biggest fear when I was a landlord.
02-03-2020 11:59 AM
leadcounsel
Quote:
Originally Posted by T.$.Racing View Post
A ton of good advice already in this thread. I'd say largely it depends on the rental market in your area and proximity to your new place, in terms of how successful keeping it as a rental could be.

IMHO a lot of people exaggerate, and make a worst case scenario, of the tenants thing. Do people not do any sort of vetting? At a bare minimum my partner and I require a $500 cash security deposit, that along with asking to see their two most recent pay stubs deters virtually all the riff-raff. I consider myself a good judge of character, but then again its not really rocket science. If someone were to come check out an apartment in a 4XL white tee, a pair of Jordan's, and they pulled up in a 1993 Caprice on rims.......I'm probably not renting to said individual. You always have credit and background checks at your disposal as well. Single mom's tend to make excellent tenants. They re-up their leases, are dependable on rent, and generally don't make a big fuss. Even the one's I would've thought were a tad sketchy never brought any b.s. home, or around their children.

A brick with a dollar sign spray painted on it is usually all it takes to handle things "internally" and motivate people to either pay their rent, or GTFO if they're tearing up the joint. By the time it comes to that, the battle lines will have been well drawn, so they'll know whats what. The first time its placed gently on a rag on their roof, above the driver's door. If that message isn't received next time its on the drivers seat
This is HORRIBLE advice.

First, it ignores reality.

Secondly, it suggests illegal possible FELONY level extortion. It's going to be hard to manage your property if you're in jail for a felony, and hiring a lawyer to defend you.

Third, a home owner stands to lose a LOT MORE in value than a car window. You break their car window, a $200 value, you might find $30,000 in damages to your rental house...

Bad renters really have a home owner by the sack. They hold essentially all the cards. All the homeowner can do is threaten eviction which will damage their credit. And some people just don't care, particularly if they have unexpected bad life events.
02-02-2020 03:53 PM
Mountain In middle school and HS I worked with a family friend part time helping him with his twenty rental houses.

I remember wading knee deep in garbage in some of his houses, I remember one house that had no doors as the tenants had burned the doors in the fireplace for heat. Downstairs we found a huge amount of stolen property from the television station that the guy worked at not to mention a dozen potted pot plants cut off and taken with them growing in the basement. All this after the people having lived there for three months without paying a dime in rent. Now multiply this time and time again year after year....

After a couple years of helping Ed with his rentals I determined that I would "never" consider getting into the rental game.

I bought my first house in a city for 28K, it was 2 blocks from a school, 2 blocks from Albertsons etc.. It was a double lot with a single dwelling and a shop/garage. Eventually Costco bought all the land and built a new store nearly across the street, I was able to tear down the old 100 year old home and sell the property for three times what I paid for it.

Then I bought 200 acres undeveloped farm land and found a loophole allowing me to put a residence on the property. I put up an old 70 foot mobile home, built my own driveway, put in my electric, put in my sewer/septic and over the years built about 6 miles of road and numerous outbuildings on it. I paid $201K for it and put another $100K into it over the ten years I owned the place. I sold it off for $380K and bought this nice little 40 acre farm with a 3,600 square foot home, 1,800 sq foot shop, barns, five ponds full of fish, 12 acres of timber, hay, a great well etc...

I bought this place when the market had bottomed out in 2012 for $280K, it had been assessed at $480K in 2008 before the market dropped out, it is now valued at around $620K to $640K.

I defy you to make that amount of money renting....
02-02-2020 02:46 PM
Mule Skinner I have seen several good rental investments locally.
However, I talked myself out of them because I wanted
- liquidity, and
- portability
.
That is to say, I want to be able to leave town...easily.

So I invest in stocks instead.
Easy to buy and sell.
Can be done from anywhere.
02-02-2020 09:16 AM
T.$.Racing A ton of good advice already in this thread. I'd say largely it depends on the rental market in your area and proximity to your new place, in terms of how successful keeping it as a rental could be.

IMHO a lot of people exaggerate, and make a worst case scenario, of the tenants thing. Do people not do any sort of vetting? At a bare minimum my partner and I require a $500 cash security deposit, that along with asking to see their two most recent pay stubs deters virtually all the riff-raff. I consider myself a good judge of character, but then again its not really rocket science. If someone were to come check out an apartment in a 4XL white tee, a pair of Jordan's, and they pulled up in a 1993 Caprice on rims.......I'm probably not renting to said individual. You always have credit and background checks at your disposal as well. Single mom's tend to make excellent tenants. They re-up their leases, are dependable on rent, and generally don't make a big fuss. Even the one's I would've thought were a tad sketchy never brought any b.s. home, or around their children.

A brick with a dollar sign spray painted on it is usually all it takes to handle things "internally" and motivate people to either pay their rent, or GTFO if they're tearing up the joint. By the time it comes to that, the battle lines will have been well drawn, so they'll know whats what. The first time its placed gently on a rag on their roof, above the driver's door. If that message isn't received next time its on the drivers seat
02-01-2020 12:25 PM
Mule Skinner In 1978 I bought the house where I still live.
Took a 15 year mortgage despite X2 wanting to string it out to 30
so we would have more free cash (that she could spend.)
Made the last payment in July of 1993...

I have now been getting "imputed rent"[*] for 26 years.

So: I say sell the old one, and get the shortest mortgage you can
on the new one. And by the way, mortgage rates are low right now.
.
.[*] Imputed rent is virtual income. It's what you would have to pay
if you rented that house from someone else.
AND IT'S NOT TAXABLE although at one point in history
congress actually considered taxing this.
02-01-2020 11:52 AM
maintenanceguy
Quote:
Originally Posted by maintenanceguy View Post
I you didn't already own this house, would you purchase it to be a landlord?
Quote:
Originally Posted by Red Dirt Walker View Post
To be fair, I've never been in the position for this possibility. Given the school district it's in, they are building a brand new neighborhood next to it I would. The only downside I have in location is that the nearest major street corner is up for sale for an apartment complex.

I probably would.
I think you have your answer. Good luck.
02-01-2020 10:54 AM
beaner I would sell and work the mortgage down on the new house. Nothing like being debt free. Plus I wouldn't want the worry of tenets and being on their speed dial for every little thing. I would always be worried if they would cook meth or something else to ruin the place.
02-01-2020 10:40 AM
Tyrone Owner finance it.
This way you never have to worry about repairs, you can put whatever down payment you want on it. Charge a higher interest rate than a bank. A 30 year note at 6-9 % is good steady income.
Hell you may get the house back two or three times because people don’t want to mess with selling it themselves.
We’ve had several that we got back, sure we had to update but once you get the house back you sell it again at full value.
Bit of a pain in the ass but is very profitable.... As long as you live close by it’s a great deal for you.
I’ve done both, rent and owner finance, owner finance is the way to go.
02-01-2020 10:21 AM
Red Dirt Walker
Quote:
Originally Posted by maintenanceguy View Post
I you didn't already own this house, would you purchase it to be a landlord?
To be fair, I've never been in the position for this possibility. Given the school district it's in, they are building a brand new neighborhood next to it I would. The only downside I have in location is that the nearest major street corner is up for sale for an apartment complex.

I probably would.
01-31-2020 07:51 PM
maintenanceguy I you didn't already own this house, would you purchase it to be a landlord?
01-31-2020 07:34 PM
Eagle Scout Survivor If you are using a property manager kiss your profit goodbye. They charge 10% of your rent for doing nothing beyond collecting rent. Repair call is extra and usually they just call a trade. Tenant does not pay it will cost extra for them to collect. They only make sense if you are using them for a big complex.

I have gone 3 months without a tenant calling with an issue and it took 6 dollars and 35 min to fix which included driving. But I also had a tenant screw me on over 2k of rent propane bill and 800 dollars of material damages. Took 2 weeks for me to fix it up.
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