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Message
Rent vs Sell Current Primary Residence
Posted on 6/23/15 at 11:32 am
Posted on 6/23/15 at 11:32 am
I have my current house up for sale on the northshore but since listing last month have started to consider renting it out instead. I have no experience on the landlord side so I have a couple questions for those of you out there who do. First, how much is typical to charge on top of expenses to ensure at least some profitablility? Second, are any types of background checks on tentants that are typical and if so what companies providing those services do you recommend? Lastly, is it more common to have tenants responsible for all utilities or do you pay and include in rent? Thanks in advance for any advice.
3
Posted on 6/23/15 at 11:38 am to rhanse1lsu
quote:
First, how much is typical to charge on top of expenses to ensure at least some profitablility?
you can only charge what the unit is worth, regardless of your expenses.
Posted on 6/23/15 at 11:40 am to rhanse1lsu
Was in a similar situation.
Put house on market, decided to rent. Now maybe you dont have a mortgage on your current house and so that income would be pretty close to money in your pocket. But based on the rental market on the north shore, it would be hard to get more than $1 per square foot per month, if not less. So think about that in relation to whatever you may be paying in mortgage, insurance, taxes, upkeep, etc...
I wish I'd have just stuck it out (put house on market end of calendar year - when no one buys houses) and sold it this spring. But ohh well. It isnt terrible.
I rented it on Craigslist and had renter pay utilities.
PS If anyone looking to buy a house in New Orleans, let me know.
Put house on market, decided to rent. Now maybe you dont have a mortgage on your current house and so that income would be pretty close to money in your pocket. But based on the rental market on the north shore, it would be hard to get more than $1 per square foot per month, if not less. So think about that in relation to whatever you may be paying in mortgage, insurance, taxes, upkeep, etc...
I wish I'd have just stuck it out (put house on market end of calendar year - when no one buys houses) and sold it this spring. But ohh well. It isnt terrible.
I rented it on Craigslist and had renter pay utilities.
PS If anyone looking to buy a house in New Orleans, let me know.
This post was edited on 6/23/15 at 11:44 am
Posted on 6/23/15 at 11:50 am to rhanse1lsu
I had no experience either, so maybe I can help.
You really have to charge what the market allows. My monthly mortgage is $1100. I asked for $1300. I think I could have gotten $1400, but I needed the house to be rented quickly.
$200 isn't a bad amount of money, but I don't touch it. It all goes to an emergency fund for repairs, termite bill, etc.
I made all applicants provide three recent pay stubs and I performed a criminal background check plus a credit check. I don't remember what companies I used. Just some I found online.
It is extremely important that you read up on what you can and cannot consider when choosing your tenants. Also, if you do decide to go against someone who could possibly sue you, make sure you have some documentation of what you are looking for.
I was really nervous because a family that was known for two lawsuits against the local school board applied to rent my home. The female was on disability, and they reminded me BEFORE I told them no that I couldn't tell them no because she was on disability. I was nervous as shite that they were going to sue me, but they didn't. I laid out very clearly everything I would consider and something I put on the form was that first come, first served would be considered if applications were equal. Luckily my current tenants were the first to call. I don't know if that actually protected me legally, but I haven't heard from them since.
My tenants pay for their own utilities. I suggest you do this too. If you pay their power bill based on your average usage, they may run the bill up by blasting the a/c 24 hours a day and leaving the lights on. If it's in the lease that you're providing utility coverage and they start bleeding you out, you won't be able to fix it for a year.
My advice is to sell if you can. I have had really great tenants and the house has been good to me. Just a few repairs that have cost around $1k total. But it's something that is always on my mind. I wish I had more of an emergency fund, but I'm always afraid that the big repair is about to hit.
Also you need to consider that insurance will be more expensive.
quote:
First, how much is typical to charge on top of expenses to ensure at least some profitablility?
You really have to charge what the market allows. My monthly mortgage is $1100. I asked for $1300. I think I could have gotten $1400, but I needed the house to be rented quickly.
$200 isn't a bad amount of money, but I don't touch it. It all goes to an emergency fund for repairs, termite bill, etc.
quote:
Second, are any types of background checks on tentants that are typical and if so what companies providing those services do you recommend?
I made all applicants provide three recent pay stubs and I performed a criminal background check plus a credit check. I don't remember what companies I used. Just some I found online.
It is extremely important that you read up on what you can and cannot consider when choosing your tenants. Also, if you do decide to go against someone who could possibly sue you, make sure you have some documentation of what you are looking for.
I was really nervous because a family that was known for two lawsuits against the local school board applied to rent my home. The female was on disability, and they reminded me BEFORE I told them no that I couldn't tell them no because she was on disability. I was nervous as shite that they were going to sue me, but they didn't. I laid out very clearly everything I would consider and something I put on the form was that first come, first served would be considered if applications were equal. Luckily my current tenants were the first to call. I don't know if that actually protected me legally, but I haven't heard from them since.
quote:
Lastly, is it more common to have tenants responsible for all utilities or do you pay and include in rent?
My tenants pay for their own utilities. I suggest you do this too. If you pay their power bill based on your average usage, they may run the bill up by blasting the a/c 24 hours a day and leaving the lights on. If it's in the lease that you're providing utility coverage and they start bleeding you out, you won't be able to fix it for a year.
My advice is to sell if you can. I have had really great tenants and the house has been good to me. Just a few repairs that have cost around $1k total. But it's something that is always on my mind. I wish I had more of an emergency fund, but I'm always afraid that the big repair is about to hit.
Also you need to consider that insurance will be more expensive.
Posted on 6/23/15 at 12:07 pm to StringedInstruments
quote:
Also you need to consider that insurance will be more expensive.
I found the opposite to be true. My homeowners, non-occupying policy is about 2K less than when I lived in the house. I got an umbrella general liability of 500K for about $400, so net out is better than when I lived in the property
Posted on 6/23/15 at 12:22 pm to BlackenedOut
quote:
I found the opposite to be true. My homeowners, non-occupying policy is about 2K less than when I lived in the house. I got an umbrella general liability of 500K for about $400, so net out is better than when I lived in the property
Who are you with?
I'm at $200k for $1000. That's after switching to a new insurance company recently. Before my rate went up $300 because the home switched to a rental.
Posted on 6/23/15 at 12:37 pm to StringedInstruments
Wrong about insurance.
Posted on 6/23/15 at 12:58 pm to StringedInstruments
Your insurance on a home that you rent should go down based solely on fact that you dont need contents and a whole host of other coverages. But I am not an insurance expert so I could be wrong. Will have to check who gen liability is with.
Posted on 6/23/15 at 1:22 pm to BlackenedOut
house 1 payment is 715ish and it rents for 875 (20 year note and flood insurance changes screwed this one up. We will be selling when these tenants move out)
house 2 payment 875 rent 1600
house 3 payment 410 rent 800
If you only have one you can't afford for the rent to be close to your mortgage (IMO) because one heat and air unit or roof or or or or or or and you are losing money on a property you probably are having to deal with at least a little bit.
house 2 payment 875 rent 1600
house 3 payment 410 rent 800
If you only have one you can't afford for the rent to be close to your mortgage (IMO) because one heat and air unit or roof or or or or or or and you are losing money on a property you probably are having to deal with at least a little bit.
Posted on 6/23/15 at 1:45 pm to bobaftt1212
quote:
If you only have one you can't afford for the rent to be close to your mortgage (IMO) because one heat and air unit or roof or or or or or or and you are losing money on a property you probably are having to deal with at least a little bit.
And to add onto this -
Unexpected expenses suck arse. Like for example, I just found out that it's going to cost $500 to fix an electrical issue in my dishwasher. Plus my $170 termite bill just showed up.
I'll end up buying a new dishwasher for cheaper, but this is still going to be $500-$600 gone out of my emergency fund account, which wasn't that big to begin with.
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