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seawolf06
LSU Fan
Raleigh, NC
Member since Oct 2007
4336 posts

Renting instead of selling



We're thinking about upgrading our home soon and I am interested in the idea of renting our current house instead of selling it. Assuming I can get financing, does anyone have any good resources to read about renting a home?

Some of the questions I have are:
Could I convert ownership of the rental to our LLC?
The house won't be far away, should I try to self manage or hire a company?
What's the minimum dollar amount over cost that I should consider renting for? (i.e. If I can't get $200/month, it isnt' worth it)







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davidengle
LSU Fan
Baton Rouge, LA
Member since Feb 2013
20 posts

re: Renting instead of selling


(no message)


This post was edited on 3/28 at 6:31 pm


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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
16520 posts

re: Renting instead of selling


quote:

Could I convert ownership of the rental to our LLC?


Title can be transferred through a quit claim deed to your LLC.

Is this house paid off? If not some mortgage companies want a full payoff (due on sale clause) if they find out you have done a title transfer.

LINK

quote:

What's the minimum dollar amount over cost that I should consider renting for? (i.e. If I can't get $200/month, it isnt' worth it)



200 PCF is my bare minimum after PITI, fees, and never forget vacancies and maintenance. They will happen just a matter of when.








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Queen
LSU Fan
383 miles from Death Valley
Member since Nov 2009
2761 posts

re: Renting instead of selling


Whatever you decide, I would get a good property management company to save you the headache. My dad and uncle had a rental property when I was younger and gave it up as soon as it would sell because of the tenant headache.





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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
16520 posts

re: Renting instead of selling


quote:

I would get a good property management company to save you the headache.


that is fine as long as it is not affecting his minimum PCF. He will have to run the numbers.






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Queen
LSU Fan
383 miles from Death Valley
Member since Nov 2009
2761 posts

re: Renting instead of selling


quote:

that is fine as long as it is not affecting his minimum PCF. He will have to run the numbers.


This is true. Definitely shop around. Some charge a flat rate, some a percentage. Check out your options.






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seawolf06
LSU Fan
Raleigh, NC
Member since Oct 2007
4336 posts

re: Renting instead of selling


Thanks for the replies. Since it's cheap, it sounds like it's worth having a separate LLC for the rental from our business.

Anyone read this?
LINK






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Gold Tiger
LSU Fan
Lafayette, LA
Member since Nov 2008
426 posts

re: Renting instead of selling


Handle this yourself. Why give part of your rent income to a third party. I have 3 rentals and have been fortunate to have had good tenants. Be specific in your lease as to what you'll do and what is expected of the tenant. Example, if you are gratuitously furnishing a washer and dryer, let it be known that any repairs are the tenants responsibility. Get 1 month's rent as a security deposit. Good luck.





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PhillyTide
Alabama Fan
The One Who Knocks
Member since Oct 2011
226 posts

re: Renting instead of selling


quote:

What's the minimum dollar amount over cost that I should consider renting for? (i.e. If I can't get $200/month, it isnt' worth it)


At least 10%, after all expenses.






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Motorboat
LSU Fan
At the camp
Member since Oct 2007
10611 posts

re: Renting instead of selling


quote:

At least 10%, after all expenses.


I'd say more like 20%, but YMMV






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Zilla
LSU Fan
Friendswood, TX
Member since Jul 2005
9992 posts

re: Renting instead of selling


I did it seawolf...didn't do an LLC or anything like that, but it might be something I should look into... I'm bringing in 1350 ...my mort+ins+tax(bigger tax bill now) runs me about 875.... My tenants asked for $100 less than what I was asking if they signed a 2 year lease, no brainer...they have only called once.... working out really well....

here's a tip, leave some mouse poisen pods in your attic before you accept tenants b/c that is something that could get out of control and you can't really be there to police it...that will keep them gone forever






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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
16520 posts

re: Renting instead of selling


quote:

I'd say more like 20%, but YMMV



most savvy investors require a MINIMUM of a 12% cash on cash return the first year with a CAP RATE of around 10+ (of course this cap rate can be hard to do in some instances due to certain factors).






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ljhog
Arkansas Fan
Lake Jackson, Tx.
Member since Apr 2009
10047 posts

re: Renting instead of selling


Sell and invest the money. The return will be greater over time.





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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
16520 posts

re: Renting instead of selling


quote:

Sell and invest the money. The return will be greater over time.



and how do you know this? link?

Maybe he wants the PASSIVE income, equity capture, market appreciation, principle paydown,and tax advantages. You think he will get the same from a dividend paying stock or fund using the same amount? can you guarantee that for him?



This post was edited on 3/14 at 2:05 pm


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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
16520 posts

re: Renting instead of selling


quote:

ljhog



still awaiting your response






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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
16520 posts

re: Renting instead of selling


quote:

ljhog



ok, since you cannot answer I am going to have to tell you you do not know WTF you are talking about. sorry.




This post was edited on 3/20 at 7:34 am


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