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any landlords here? A few questions...
I had posted a few days ago about a deed in lieu of foreclosure (thank you for the responses!) and after talking with a real estate attorney and weighing all of our options we have decided to rent it out. We'll try our hand at the real estate game in a year or two but we've already had a few people inquire about us renting so we are going that route.
If you are a landlord, do you go through a property managment company? DH wants to do it ourselves. Our friend and neighbor said he could watch the house for us. It's not like we're going on vacation. This is a long term situation. We're moving out of state with no plans to ever return. I would rather go through a company. It seems less stressful on the homeowner. I need something with the least amount of stress...LOL. Please tell me your experience with renting out your home. We are completely new at this so any info is helpful! TIA
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Re: any landlords here? A few questions...
I own 2 rental properties and manage them myself. One is 3/4 of a mile away from my home, and the other is 9 miles away. Not hard to manage, at all.
I do not think I would manage a property myself if I was out of state. I just don't see how that would be easy or non-stressful. I would definitely use a management company for an out of state rental.
We've been landlords for 4 months and our property is also out-of-state. We were kind of do-it-ourselves type people so we do not have a list of reliable contractors. So it is not convenient at all for us to go there if there was something emergent so we went through a property manager.
So far, the PM hasn't been that helpful. Essentially what happens is the tenant calls the PM, the PM then sends over someone to take a look, and bills us. Sometimes the problem was really nothing and did not need a contractor and that type of money. It's frustrating for us since we used to do everything ourselves and now we're getting billed $100 just for simple diagnostics.
If you guys have a list of reliable contractors and have people in area that won't mind going over to your house once in a while, then I suggest you take that route. But if not, then a PM would probably be the way to go.
We have over a dozen properties. We manage ourselves but DH is a RE broker and we have our own contractors that we use on regular basis for repairs etc. All our rental properties our within our state. We have properties in other states, but don't rent them out
If we owned rental property out of state, I personally would not want to have to manage ourselves especially when there is an emergency or major repairs need to be made.
We're only an hour away from our property, but we still use a property management company.
We didn't want to deal with the paperwork and legal stuff required - we frankly don't know much about it and preferred going with people who do it for a living. We don't want to deal with emergency calls if something breaks - when our garage door needed to be reprogrammed, the company took care of it and saved us the hassle of driving over to fix it ourselves or trying to hire someone on our own to go out and fix it.
The PMC took care of advertising, processing applications, and credit checks for us at no cost. HUGE help to us, again since this is new territory for us and we already had so much going on with our own move and housing situation.
This, except we have only 1 property and it's 10 miles away.
Also, our rental is a condo, so many maintenance issues are handled by the HOA. So far (knocking on wood), the only maintenance issue in 2 years was with a heat register, and since there's a central heating system in the building, the HOA fixed it and it didn't cost us anything.
It's been super easy to handle ourselves, but if we were renting a SFH with more potential maintenance issues or were living out of state, I think I'd go with a property manager.
Mr. Sammy Dog
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We own 2 properties out of state. Find a good PM and they're worth every cent. They'll be so wonderful you'll want to send them Christmas gifts! They'll take care of everything before you even knew that it needed to be done. Find a crappy PM and they can be more of a pain than just doing everything yourself.
If you don't have a rec, check Yahoo and Google reviews and the BBB. Take them with a grain of salt, but if you see the same complaints over and over, know there's a reason for it. (We once had a PM tell us "it's not our job to check on your house" after horrendous, FEMA-level flooding. W.T.F. I gave them a furious 1-star review on Google and was thrilled when someone else later came along and gave the same review.) Check to see how many properties they're managing and what types they are. (Their local president apologized a year later, admitting that they had over 400 properties and inadequate staff and were completely unable to handle an executive home like ours.)
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Thinking of doing cosmetic updates to a dated home? These were our costs.
It's been a while, but I used to have several rental properties, which I managed myself from 2 hours away. I had a great contractor who could fix anything, so that helped a ton, but it's not something I would do again. It was challenging at times to meet with prospective tenants from such a distance. It was also difficult to absorb and keep up with all of the legal stuff. If I had to be a landlady from out of state, I would definitely hire a management company.
There are many types of companies to choose from, with fees generally ranging from 10%-20% of the rental income. I strongly reccomend making a list of the services you want to be provided, so you can find a company that fits your needs. Things like cleaning the gutters, changing filters and having the furnace and a/c serviced, all still need to be done, so find a company that will handle maintenance in addition to repairs. I would also look for a place that is willing to check on the property when it is vacant, or when there is a weather event that could cause damage that the tenant may not know to look for or report.
ETA: Once you move out, make sure you notify your insurance company, because the conditions of your policy may change. I would also require the tenant to carry renters insurance.
I own and manager a number of rental properties but I would never recommend it for someone who doesn't have previous experience doing so. Also, it can be easier or more difficult depending on what state you're in. CA real estate law, for example, tends to lean toward protecting the tenant while in other states such as NV it leans toward protecting the landlord.
Because of these "economic times" (ick, I hate sound like that) but we've been taken to court a number of times already, won ALL our cases, but its NOT FUN! It takes a lot of time, is extremely stressful, and if you lose (even just a judgement of a few dollars) can end up on your credit score. There's a lot of things you could get sued for if you aren't familiar with real estate law in your state. We've never been taken to court before this year, but it seems lately people are desperate to squeeze something out of you when they feel entitled. I've also have had to help friends who have had their investment properties trashed and were out thousands of dollars because they didn't follow property procedure.
If you can afford it, I'd highly recommend hiring a professional (with a solid reputation!) to manage the property for you. Not saying you can't handle it yourself, but just one awful tenant can make the whole thing not worth while.
I'm sorry to hear of the difficult spot you are in. I think renting out the home is a great option.
I'm a Realtor and property manager in CA. I'll give you an idea of what I do as a property manager.
The services I provide can vary from client to client: some want help with everything from tenant placement to paying property taxes and all the bills. Some owners want to be more invovled with tenant placement and prefer to pay some bills themselves. Depending on what a client wants, I can handle tenant screening & placement, marketing, ordering & reviewing credit reports, setting rental amount, collecting rents & late payments, preparing a home for rent, paying all bills, hiring & managing services (gardener, pool guy), respond to all maintenance requests, manage repairs, coordinate with contractors, provide monthly accounting and disbursements, disburse security deposits, inspect after a tenant moves out, negotiate and execute a lease and general tenant relations. I charge a small percentage of the monthly rental amount. I also maintain a reserve amount so that I may repsond to repairs quickly, without having to go to the owner for approval. This protects the property by fixing issues right away and helps keep happy tenants.
My largest concerns for you about managing it yourself would involve leases, disclosures, and maintenance. While your neighbor has offered to keep an eye on the property, that is really a lot to ask. They will be in the odd position of potentially 'spying' on their neighbors and may also become less attentive as time goes by. Every state has their own landlord/tenant laws and can be very strict and specific. If you do decide to do it yourself, you may want to consider hiring an attorney or Realtor to help you place a tenant and negotiate & execute the lease.
Especially since you are moving out of state, I'd really consider hiring a prop manager. You certainly can manage from a distance but there is a lot of value of having someone locally that works for you and helps to take care of the property.
Hope that helps some, best of luck to you!
Lighthouse State Beach, Santa Cruz.
I have been renting out my condo for over two years now. It's about 5 miles away and I hired a PM to deal with everything. The fee is half the first months rent and then 100/mo after. They put the money in automatically. They ask about major repairs and so far, we have had a fridge and water heater go. I have pro-actively repair things and she has organized everything also.
It's worth it totally.