moved to buffalo....thinking about renting my Midwest home (Florida: sales, real estate)

[Mark Komo]

Seems real estate sales are terrible in the Midwest, specifically Chicago West Suburbs. Now I do have some relief via the relocation service, but thats like my last option.

Wondering if anyone has any insight in terms of renting your home (1 year lease), being so far away. Never done this type of thing before, so concerned about legal ramifications, tax implications, etc.

[HomerBrink]

Fnd a property management company and be sure they do a good job screening applicants. It will cost you some $$ but worth the peace of mind. That's all I can offer.

[UpstaterInBklyn]

I've been renting out my home in Blasdell since we moved to NYC.

Originally, we thought we would rent it out for year until we got settled here then sell it, but three-and-a-half years later, we're still landlords.

We're very lucky in the fact that we have a great tenant and the person next door to the house is a good friend and acts as an unofficial property manager.

Property management fees are probably not feasible for a single family dwelling, especially if you have a mortgage payment. Assuming that is the case, I can offer the following tips for working without a property manager:

1. Above all, make sure you find a quality tenant. Nothing could be worse than a bad tenant. In fact, no tenant at all is better than a bad one. To find a good one, make every prospective tenant fill out an application and ask about job/salary, length of employment, former landlord references and an authorization to perform a credit check. Check all references and run the credit check. There are companies that provide credit checking services for landlords, but you have to go through an application process of your own to prove your identity first. I don't know about Illinois law, but in NYS you can legally charge a reasonable application fee to cover the credit check cost.
   
   
2. You can impose a minimum income requirement (at least in NYS), so go ahead and screen all applicants below a certain income. A good guideline is 30X-40X the monthly rent. Ask for a copy of a recent pay stub to verify income during the application process. Also be very wary of roomate and boyfriend/girlfriend situations if multiple incomes are required to meet your income requirement. These relationships are very volatile and inevitably end up costing you.
   
   
3. Have a very comprehensive lease that leaves no room for interpretation. Renting a house is different than an apartment because there is probably some expectation that the tenant will be doing things like mowing the lawn and snow removal. Make sure all tenant and landlord responsibilities are outlined in the lease. If it is not explicitly stated, you are likely to get stuck with it. You will always be responsible for plumbing, electrical and heating/AC. Help the tenant out by leaving your lawnmower, snowblower and other lawn tools there. The tenant really can't be expected to have to purchase these things.
   
   
4. Another good thing to include in the lease is an inventory of all of the items and fixtures in the house, with an estimate of their wear and tear. When the tenant moves out, there will be some normal wear and tear, but this inventory makes everything clearer in case of disputes. Also take tons of pictures before the tenant moves in - walls, closeups of the appliances etc. If there are any existing flaws, document them in photos. If you are ever in a dispute after the tenant moves out, you'll have before-and-after pictures to back up your case.
   
   
5. You probably have a plumber and electrician (whom you will need), but also find a reliable handyman for small jobs. Even with a good tenant, little things will break and need to be repaired.
   
   
6. If you are friends with your neighbors, hopefully one or two of them will help you out by keeping an eye on the property and acting as your eyes and ears in other ways. In my situation, my good friend next door responds to occasional requests from the tenant and gives me an honest appraisal of the situation. Appreciate these people with gifts during the holidays and take them out dinner when you are visiting your hometown!
   
   
7. Once you find a good tenant, take care of them by being reasonable and choosing your battles. A little bit of goodwill on both sides goes a long way in the landlord/tenant relationship.

As for taxes, you will need to file a Schedule E with your tax return. You can deduct expenses (including property taxes, mortgage interest, travel and mileage) from your rental income, so document every expense and save receipts.

[Mark Komo]

USIB, man some great advise. I am a CPA so I dont worry much about"workin" it. My biggest concern is the rif raf. Would it make sense to get creative in marketing on my own, ie, reach out to some of my HR big shooter in the corp world near by?

[RayK]

Originally Posted by Mark Komo

Seems real estate sales are terrible in the Midwest, specifically Chicago West Suburbs. Now I do have some relief via the relocation service, but thats like my last option.

Wondering if anyone has any insight in terms of renting your home (1 year lease), being so far away. Never done this type of thing before, so concerned about legal ramifications, tax implications, etc.

There are many places online that you can find a free 1 year lease agreement for download. Just google it and download. As for rental advice I offer this...

Make sure you do have some sort of lease agreement, it will CYA. And possibly getting some help from a neighbor or a rental group is a good idea.

Originally Posted by UpstaterInBklyn

Above all, make sure you find a quality tenant. Nothing could be worse than a bad tenant. In fact, no tenant at all is better than a bad one. To find a good one, make every prospective tenant fill out an application and ask about job/salary, length of employment, former landlord references and an authorization to perform a credit check. Check all references and run the credit check. There are companies that provide credit checking services for landlords, but you have to go through an application process of your own to prove your identity first. I don't know about Illinois law, but in NYS you can legally charge a reasonable application fee to cover the credit check cost.

There are some people who pay their rent just fine and maybe would not pass a credit check. Some landlords do a criminal background check only and do not bother with credit. Anyone even those with good credit can not pay rent.

Originally Posted by UpstaterInBklyn

You can impose a minimum income requirement (at least in NYS), so go ahead and screen all applicants below a certain income. A good guideline is 30X-40X the monthly rent. Ask for a copy of a recent pay stub to verify income during the application process. Also be very wary of roomate and boyfriend/girlfriend situations if multiple incomes are required to meet your income requirement. These relationships are very volatile and inevitably end up costing you.

Again this maybe a bad idea unless yo plan on charging an arm and a leg for rent. And in that case you will most likely "sit" on the house forever without a tenant paying the bills in now 2 places instead of one. There are plenty of people who do the "roommate" thing just fine. I've had the same roommate for 10 years am I a risk now because we are roommates? We pay our rent just fine. So unless you really want to be very picky in a time where many houses are being foreclosed & the housing market is plummeting I suggest a little maneuvering room in this area.

Originally Posted by UpstaterInBklyn

Another good thing to include in the lease is an inventory of all of the items and fixtures in the house, with an estimate of their wear and tear. When the tenant moves out, there will be some normal wear and tear, but this inventory makes everything clearer in case of disputes. Also take tons of pictures before the tenant moves in - walls, closeups of the appliances etc. If there are any existing flaws, document them in photos. If you are ever in a dispute after the tenant moves out, you'll have before-and-after pictures to back up your case.

The itemized thing in the lease is overkill IMO. Taking pictures, however is a good idea and will save you some potential headaches.

Originally Posted by UpstaterInBklyn

1. You probably have a plumber and electrician (whom you will need), but also find a reliable handyman for small jobs. Even with a good tenant, little things will break and need to be repaired.
2. If you are friends with your neighbors, hopefully one or two of them will help you out by keeping an eye on the property and acting as your eyes and ears in other ways. In my situation, my good friend next door responds to occasional requests from the tenant and gives me an honest appraisal of the situation. Appreciate these people with gifts during the holidays and take them out dinner when you are visiting your hometown!

Both good ideas.

Originally Posted by UpstaterInBklyn

Once you find a good tenant, take care of them by being reasonable and choosing your battles. A little bit of goodwill on both sides goes a long way in the landlord/tenant relationship.

Not sure what this even means. You plan on battling your tenants?!?!?! I suggest you don't have battles with your tenants.

My family has dealt in real estatefor many, many years. Two are real estate agents (one retired) and those plus a few others have been landlord for a very mlong time in the Jacksonville, Florida areas. So this is not coming off the top of my head. Check in your hometown about if you need a specialized tax sheet, you most likely do as stated before. Also check teh laws in your home town. Landlord/Tenant laws are different by each state/city so its a good idea to be up on these. I do not suggest you be so tight with your tenants but you will have to do a little bit of work. You will be ultimately responsible for repairs and various things that happen in the home while you are not living there. you will also need to have someone ready to go at a moments notice in case of an emergency at your rental. Things happen, plumbing bursts, fire, electical problem at 2 am etc. Its all possible adn you are responsible. It will be somewhat hard dealing with a rental from halfway across the country. You maybe want to look into a rent to own situation instead. Any local real estate agent can help you with your options but remember they will more and likely charge you a fee for their time.