International Nesties
Dear Community,
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Anyone Landlords?
We're looking at moving overseas for 3 years and have started talking about trying to rent our house instead of sell it since we would lose so much money right now. Does anyone rent their house in the States while they are overseas? Where do we start? Any words of advice or caution? Thanks.
Re: Anyone Landlords?
We just got back from a three year rotation and rented our house out while we were away. Here is what we did:
The first thing you need to do is get a property manager! We paid our property manager about $120 a month and it was worth every penny of it. The second thing we did was keep at least (minimum) of three months mortgage in the bank at all times in case your tenants don't pay or are late on their rent and you continuously need to pay mortgage before they pay rent. Also have at least two months mortgage in the bank at all times for when stuff goes wrong (and it will). Little things add up! Also, save a few hundred a month for repairs when you move back into the house. You'll probably need to re-paint the entire house and we had to replace flooring because our tenants really messed up our carpeting. We just moved back into the house and have dropped probably another $14K back into the house just moving back in ($7K for hardwood flooring and $4K alone for painting the house - that didn't include doors and trim, that was just the walls). Don't count on using the security deposit at the end either. Our tenants didn't pay the last month's rent so we did keep the security deposit but we had to make all sorts of repairs and pay the mortgage so we got screwed. We could take them to small claims court to get the money but it will take months for that to happen.
My advice is mostly the money side because we got screwed with our tenants. The first set of tenants came in and stopped paying rent about three months into living there. We ended up blowing through all of our savings in the first year of having tenants because it took 90 days (or 3 mortgage cycles) to evict the tenant (they didn't pay for 30 days, so we had to pay mortgage, then we took them to court and that took 30 days so we paid mortgage again, then we evicted them and the house stayed empty for 30 days so we had to pay mortgage again PLUS repairs on the house for the first set of tenants). By the time this happened, our savings was almost gone.
Then we got the second set of tenants who constantly paid late so we had to front the mortgage until they paid (the standard lease gives you from the 1st to the 5th to pay - they always paid on the 5th but the mortgage was due on the 1st). Also, by the time we got the second set of tenants, the economy in our area had tanked so we got $300 less a month so we ended up re-financing our mortgage just to afford the monthly payments.
I think it would have been totally different if we were doing this as an investment property but it was our house so everything was personal and stressed me the f out.
So my advice is to be prepared financially.
OH! Also take pictures of your house in the state you give it to the tenants. Our tenants stole our appliances! They replaced our nice high end appliances with crappy old nasty appliances. When we tried to do something about it, the second set of tenants said those were the appliances they were given and blamed the first set. By the time this came along, our first set of tenants left the state and we couldn't ask them. Cluster fork. So now we have ugly messed up appliances that we'll have to replace in the next few years.
The tenants also did weird things like install a door and frame on an open floor plan, added 9 electrical outlets to our dining room (why would you ever need 9 outlets in a dining room?!?!), switched the way all our doors open (so they all stick and don't fit in the door jambs), installed homemade storage in the garage I have to have professionally removed but we can't park two cars in the garage so we have to do it, left a ton of garbage in the garage (it took a whole 1-800-junk car to haul it away). Our yard looks like the mohave desert. And we live in a NICE neighborhood in a nice house so it wasn't like these were hooligan college students living here or something.
I'm going to stop now
This is all good advice.
It's not straightforward, and it's not easy, but if you think ahead for ALL CONTINGENCIES, even weird stuff, then you might make out ok. This was one life situation where my husband's pessimism really came in handy. And yes, you'll need emergency backup money up the ying yang.
We bought a flat in London when we sold our house there, it was before the market tanked and we wanted to stay on the property ladder there.
I think it would be so much harder emotionally if it had been our house or was to be our house at some point.
Once you find a good tenant, who pays on time, you want to hold on to them like they poop gold bricks.
And yes even good tenant wear and tear warrants a local property manager and a repaint and recarpet every few years or less.
Yeah that's right my name's Yauch!
We are (but newly so). Just bought a condo (and rented) while living abroad.
We have a property manager and I highly recommend spending the time and effort to find a reliable PM. Not sure where you're heading, but I'm 6hrs away from our East Coast condo and it's a load off to know someone's readily available for the tenants.
DH and I are landlords by choice. We were landlords before we moved overseas as our properties are investments, not our home.
Things you will need to think of:
1. Writing a legally tight contract, include extras for pet deposit, etc...
2. Have at least three months, but I prefer six months in the bank to cover time between tenants. Speak to at least three appraisers to determine our rent and do your own research.
3. Determine the lowest amount you will go and remember for every month it is empty, you are losing 12% of your total rental income. It's more economical to drop the rent by 10%.
4. We don't have a property manager (we have a trusted friend who is also our business partner), I've heard mixed reviews and they do take a cut. They also don't care as much as they want someone in your property. A personal friend that you could pay $150 or so per hour would be much cheaper and care about the quality of tenant you get.
5. Are you going to offer it furnished or not?
6. Determine who is responsible for lawn care if you have a lawn.
That's all I can think of at the moment, but I hope that is a starting point for you.
Good luck!
We have been landlords for seven years now and nearly five of those years have been overseas and we've never had a horror story!
I have actually thought about getting into property rentals for a little extra money. I think you have a lot less emotionally tied up in it and I'm assuming for liability reasons you've created an LLC for the houses, right?
WRT no. 4 above, my BIL is our property manager. He refuses to take money for it. This has good and bad points, mostly bad IMO. We're on the priority list but not where his paying clients are. Plus if he's super slow to do stuff we can't really ream him out about it or threaten to stop paying him.
So there are good things and bad things about a personal relationship with your property manager versus just a business relationship.
Yeah that's right my name's Yauch!
Thanks! I'm glad to hear there are some good tenants out there. Ironically enough, we got a call for a showing tomorrow (we've had it on the market 6 months!) so we'll see if that leads anywhere.
I appreciate the information- it def helps us start thinking through some of the issues we need to in order to make an informed decision.
Yes, and we also have completely separate accounts. At the end of the year if we are over a certain amount, we get dividends.
It is not emotional, it is business at the end of the day.