Anybody own or manage rentals?

I have the opportunity to purchase a new home and still keep my current home was wondering about pros and cons. Any advice should i do it under an llc? Those type of things any thing i schould look into or think about before i do this?

A lot of headaches being a Landlord for the small return.
Are you good at doing your own reno's?

Property taxes keep increasing.
Some tenants can destroy a home quickly.
If you've lived in the house for the past two years you can sell it and not have to pay income tax on it. That's what I've done. I like to have cash at hand.

My current place is 1000 square foot on 70 acres. Its doubled in value since I bought it. Looking at a bigger house couple miles down the road where my parents could also live as they are in their mid 70s and disabled. New home should increase in value with time . My wife has her family home and rents it to family. I was looking at value in 15 years at retirement time. The 2 rentals should be worth 750 grand at least at that time doubling our investments not counting income from rents.

Sounds like a good plan to me but everyone has different ideas and I'm certainly not well known for making good decisions. And there's always the unknown slipping up on a guy. One thing you can count on, taxes will continue to escalate and eventually it will be difficult to own any real property.

I have an Aunt in Seattle living in a very old two story house that is assessed at over $900,000.

I love rental property. I think it’s a very solid investment, with lots of deductions. You have to look at long term. I believe it’s a long term strategy. We have several houses, and the only thing I can see wrong is I don’t have more. You have to be smart who you let in. They should have an 800 or better credit score with a solid job and long term employment history. Our houses are with property management, so very little headache at all. We make less because of that, but I do less. When the negative people start telling me all the doomsday talk about rentals, I just nod my head and ask them how many houses they rent out. Turns out most will say none.

Always worked good for me four secrets to being a landlord. Screen your renters as best you can number one. 2,3,4 is first months rent, last months rent and equal deposit. No sad stories or payments money up front and you got a lot of worries taken care of. If they can't come up with that the finances are not in order and you will be the last to get paid or not paid at all. We are lucky also in Wy if you have a lease or payment agreement. If they are late 3 days with the rent and you have the documentation the sheriff can put them out on the street and you own anything left. Remember its a business and you need to run it like one and not a social problem. I would rather have a bit less rent and and good renter than a higher rent and problems. Take your time and find out all you can about potential renters. Have and application to give out and have them fill it out. Get references of past landlords and supervisors do anything you can to find out if they are a potential problem. Have your own finances in order and be ready to pay the bills if your between renters so you don't have to jump on the first offer.

My wife and I have 5 rentals, We screen our renters big time. one thing we learned was ask if you can check with the power company for bill history. That's a sure way to see if they pay their bills. also furnish garbage service and they are more apt to keep things clean. Notice what their car looks like, if it's clean pretty good chance they will keep your rental clean. We will NEVER rent to any one on any government rent help program (Did it once, ended bad for us) We also make them get and prove they have renters insurance. It covers some things your insurance won't. If they don't have a job they won't rent from us. All in all we have not had very few problems. Take lots and lots of pictures before any one moves in, Then you have proof of damage if it occures..

Years ago we had 7 rentals, we rented one of the nicest homes to the new school superintendant of the district. Him his wife (who was a nurse) and one teen age son. We didn't get any back ground thinking of his position and hers. Well they paid the rent on time, kept the yard up, all seemed well until they moved out and we had several thousand dollars in damage inside. so I don't care who it is we do a major back ground on all of them

Been managing rentals since 1983. Owned them since 1990.

Get a good lease and enforce the crap out of it. Be nice, but take no crap. Enforce late fee like it is your job. They will get the picture quickly.
When it is good it is great. When it goes bad, cut the loss as quickly as possible. Have a heart when folks are having troubles but, don't let them tread on you.

Do background checks like it's your job and weed out the liars. Ask them if they have any outstanding judgements. Ask them if they have ever been to court for a landlord tenent issue. Let them lie to you and then do the back ground check. Weed them out.

Also figure out what you think is proper amount for rent and add a 100.00 a month. This helps weed out the takers. Good luck.

Be very careful about who you rent to.

I own a few rentals. I Make a significant portion of my income from them. The only way someone can say they aren’t profitable is if they’re over leveraged. I own mine outright and they are cash cows. Even when things go wrong. In the Boise area prices and rent continue to skyrocket. I’ve made six figure gains in appreciation alone in the past two years. Even if prices went down, people will always need a place to live. That’s not counting rent. If I lost my job tomorrow I wouldn’t bat an eye. If I could talk my wife out of the monster house we live in ( 5 bedrooms 4 baths) I would move into a little house and buy even more.

If you’re thinking about buying some, make sure you can float the payment without any renters for around 6 months. Next, never buy in an area on the way down. Boise is a haven for people who have big fat equity in places like California, Seattle, and San Francisco. They sell their homes for 800k to over a million and buy a brand new home in a great neighborhood for 400k and have a half million to invest. They still view this as a bargain so prices will keep on rising here anyway. Idaho in general is a destination for political refugees from other states. Point is don’t buy in a place in decline.

As for LLC’s you can go that route for safety. I went ahead and bought an umbrella policy with an additional million dollars in coverage which just bolsters my regular homeowners policy.

As far as people trashing my homes, it hasn’t happened yet. It’s avoidable to a large degree. My mother in law is a property manager and was full of good information when I got started. There are companies that will do an intensive screening for around $30. I have the applicants pay for it and if I rent to them, it comes off the first month rent. Before I ever get that far with them, I flat out ask their credit score. Anyone under 650 is automatically disqualified unless I can get someone to co-sign for them who has good credit. Next, I ask if they they make at least 3 times the rent. No equals disqualified. I call all bosses to verify employment. Then I ask if they have ever been evicted. I’ll find out anyway but if it’s no, I ask if they can provide canceled rent checks for six months. If they say they paid cash, I ask to see bank records showing the withdrawals. Finally I ask if they have any convictions for sex offenses, acts of violence of any kind, theft, drugs, fraud, or arson. Any of these is a no go. If they seem good to go I do a thorough background check via the screening company. You’d be amazed at how many people lie anyway knowing I’m gonna do a check. Every adult living in the house gets one. If they lie, I move on and they forfeit the application fees. I write into my contract that if anyone moves in who isn’t on the original contract, that’s a breach and I may choose to evict at my discretion. If I let them stay, they have to pass a background check, must pay an additional 200 per month retroactive to the beginning of the lease. I get them to agree to that on the lease and needless to say it doesn’t happen. Idaho is very landlord friendly. Never buy a rental in a renter friendly state. I’m lucky here because our vacancy rate is next to zero. If someone moves I get 20 people banging on my door wanting to rent so I can afford to be really picky. As long as I apply the same rules to everyone I don’t get myself in trouble.

If you do buy a rental understand that you are providing a service. If my renters call about something broken I fix it immediately and with no complaints. I don’t own apartment buildings because I severely limit my resale pool of buyers. I stick with single family homes. Easy to sell if I choose to. Also keep a big reserve of money for the inevitable repairs. I don’t get greedy either. My rents are all around $100 under market value. People appreciate that and tend to stick around.

I would do it a hundred times over. Best decision I ever made. Good luck.

Have owned a duplex for 15 years. I hate it. Many have bee n great renters but the last one was always good for the rent and paid early. They were in the unit for six years. A husband and wife. The wife stayed at home. She never vaccumed in six years. The toilet had (This word is unacceptable on Trapperman) stains I had to use sand paper to get it clean. When they left she said the unit is not very nice, I said it was nice with new carpet when you moved in and you created the crap hole. They moved out mid-Feb when it was 31 below zero, told us the end of March. They turned off the heat. We had 18 inches of water in the basement. Cost us $4000.00 to get it nice again. They wanted there deposit back, guess they got. Stuck us with water and electric. The Mr had three different names which we found later when bill's came in. Such fun!

I do work for a couple people who own rentals. One has been doing rentals for some time and the other is fairly new. The guy who has been renting longer pays better and uses higher quality materials. I do have to deal with Tennant's and the ones I the nicer homes are much more pleasant. Good luck.

Birdman do you do regular inspection on the inside of the property? I don’t do them every 6 months like the contract allows for but often enough that when I go inside they’ve either been keeping a tidy house or go on a cleaning marathon before I get there. Either way is fine with me. I don’t want any $4000 surprises especially avoidable ones. You could issue a correct or quit notice before it ever gets to that stage.

Since you're new at it. I would suggest going through a realtor for the first time renting it out. Usually costs the first months rent. Let them do all the work.
Then have them give you a couple of potential renters names. Go and do your own background check on them. Like was said above, get utilities to send you payment history's.
Interview each candidate without the expectation of renting it out to them.
Make sure that the lease has the names of each person living there on it. With the stipulation that if anyone else moves in their name will go on the lease and the rent will increase.
If you're going to allow pets either do a one time pet fee at the beginning of the lease, or include a price in the rent. Dictate the size of dog allowed. We usually do the extra pet fee per month for dogs.
Make sure it is spelled out in the lease what is expected of them as far as snow removal, lawn care, general upkeep.
If you are furnishing appliances make sure they know they stay there at the end of their lease. Had one try and take a stove out the was supplied by me. They weren't happy when the cops showed up and made them put the stove back in the house and reconnect everything.

If you get a good tenant it can be a great experience. If you get a bad one it can be horrible.

ohhhhh Don't rent to relatives. They'll be your worst nightmare as tenants.

I did get inside of the unit several times. They do not speak our language and I do not speak there's. I did tell them to clean this place up, get a vac. They new I was coming because of a water leak above. The upper and down unit did not like each other even though they spoke the same language. We do tell them they needed a vac and to clean the place. We have a creek that floods the neighborhood so the tenant choice is limited. Fema might buy us out by 2021. We are in a town where Ashley Furniture is produced. So we are hoping that will happen. Do to the flooding problem by all the rain the last few year we are unable to sellout. There is a dike but not high enough. When 500 truck pass your place every day it is like fracking, the ground vibrates with every passing truck. The dike is being fracked with every truck passing. We have water leaking in the basement that we never had 15 years ago. Now we go thru a new sump pump every year.

I make them put the water/sewer in their name. In our town the city can't come back on the landlord for any back fees. My son has 14 rentals in a differant city where he IS resposible for any back fees even thou there not in his name, and yes he has got stung a few times. He has so many rentals that he has a hand man that he rents to in lue of rent, works good for both of them. as every one is saying do a thorough back ground. we hire a rental management company to do the background check for us. Also as far as pets there are 7 breads of dogs our insurance will not cover so NO pets.

Oregon is not a friendly state for Landlords at all

In our state you have to provide a smoke detector in every bed room and by the heat source (which I would even if it wasn't a law) also a carbon monoxide detector and a new fire extingisher every year or the type that can be tested every year.

If the renters have been in your house for more than a year it takes 90 days to get them out, a single woman with kids up to 120 days

I can't complain we have just had great luck so far with our renters and we have very little turn over, and we have been doing it for 20 years with only a couple bad renters