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I have heard agents comment that resale on a home that was used as a rental can be lower than resale on a owner occupied home. I believe this would happen more from the condition of the home than just the meer fact it had been rented. I would find out how much of a loss you would take to sell it now and quick and compare that to longterm costs of repairs/replacing carpet/painting... If you are looking at a $10,000 loss now you may spend that in taxes, home owners insurance and repairs in just one years time. For me it would be all about the math...
Renters are a mixed bag, regardless of whether you go through a property management company or not. However, it's better than trying to pay a mortgage with no income.
Good renters are awesome, bad renters can lead to having to write letters/ phone calls threatening taking them to court, lining up repairs, etc.
I went through a property management company and had both experiences (this was a rental in Raleigh though)
TR Lawing and Brown & Glenn are 2 good property management companies in Charlotte.
TR Lawing and Brown & Glenn are 2 good property management companies in Charlotte.
Good Luck!!
Both TR Lawing & Brown & Glenn are considered more... not quite slumlords, but definitely not for higher-end properties - TR Lawing more so than Brown & Glenn. If it's a nicer house in a good location, I would steer clear of those companies.
There can be some truth to this but also some of it is from agents that don't want to loose properties to the rental mkt. If you are only $10K away from the mkt and yr magic number I would probably say sell it.
Tenants are allowed normal wear and tear. Small holes in the wall from pictures, scuffs in the flooring, misc small broken items (towell bar, door knob, etc.). In larger houses this can be upwards of $500 even for just a year. If you do plan on renting yr house you need to be prepared to do a little work at the end to get it in tip top shape to sell. But this is generally the case in owner occupied properties as well so its really a wash.
In general if you are thinking of renting yr house out i/o selling I urge most owners to have a somewhat longer timeline then most think. At least 3 yrs in most cases. Part of this is in case the mkt doesn't bounce back right away, and part of it is just general landlording advice. Landlords make money with good long term tenants. If you are having to find a new tenant every 12 mnths yr bottomline will take a beating. Sometimes its unavoidable, which leads to the question of "mitigating" risks of being landlord.
Mitigating is a great word in this application as you can never eliminate the risks completely. There are several ways to mitigate risks, but the 2 most basic are having a set list of legal qualifications for screening applicants and marketing the property appropriately. If you market the property correctly which means charging a reasonable amount for the rent as well using every channel available to bring in prospective renters you should have a decent pool of applicants to choose from and be able to hold firmly to yr predetermined qualifications. If you are too greedy and charge out of market rents or rely simply on a Craigslist ad and a homemade sign from Home Depot then you might just be playing with fire.
There can be some truth to this but also some of it is from agents that don't want to loose properties to the rental mkt. If you are only $10K away from the mkt and yr magic number I would probably say sell it.
Tenants are allowed normal wear and tear. Small holes in the wall from pictures, scuffs in the flooring, misc small broken items (towell bar, door knob, etc.). In larger houses this can be upwards of $500 even for just a year. If you do plan on renting yr house you need to be prepared to do a little work at the end to get it in tip top shape to sell. But this is generally the case in owner occupied properties as well so its really a wash.
In general if you are thinking of renting yr house out i/o selling I urge most owners to have a somewhat longer timeline then most think. At least 3 yrs in most cases. Part of this is in case the mkt doesn't bounce back right away, and part of it is just general landlording advice. Landlords make money with good long term tenants. If you are having to find a new tenant every 12 mnths yr bottomline will take a beating. Sometimes its unavoidable, which leads to the question of "mitigating" risks of being landlord.
Mitigating is a great word in this application as you can never eliminate the risks completely. There are several ways to mitigate risks, but the 2 most basic are having a set list of legal qualifications for screening applicants and marketing the property appropriately. If you market the property correctly which means charging a reasonable amount for the rent as well using every channel available to bring in prospective renters you should have a decent pool of applicants to choose from and be able to hold firmly to yr predetermined qualifications. If you are too greedy and charge out of market rents or rely simply on a Craigslist ad and a homemade sign from Home Depot then you might just be playing with fire.
Great info Palmetto. I would also add this. It seems that taking a primary residence and switching it to a rental can be difficult for a variety of reasons. The main one I've seen is it can be hard owners to cover their mortgage/insurance/property tax costs when they did not go into the original purpose from the stand point of an investment property. There are those lucky few who did not finance via FHA and who have low enough P & I payments to make the numbers work. What I find is when people are trying to cover the above costs in a monthly rental amount they have to ask for far more than anyone sane person would pay in rent. Now one advantage I can think of is being able to claim a loss when they do go to sell. I am not a CPA but my understanding is on a primary residence you cannot claim a loss for losing money when you sell but on an investment you can.
Definitely lots to consider and think about. I would say somewhere between a good realtor and a good property management company you should be able to figure out the right answer for you...
Last edited by gkleoni1; 03-04-2011 at 03:10 PM..
Reason: spelling
We rented out our house (6 beds and 4.5 baths) near Concord Mills. We almost went with TR Lawing, but there were some things that we didn't like and decided against them.
We actually ended up renting it out ourselves. So far we haven't had any problems. The people renting actually use to live in our neighborhood. We are crossing our fingers.
Both TR Lawing & Brown & Glenn are considered more... not quite slumlords, but definitely not for higher-end properties - TR Lawing more so than Brown & Glenn. If it's a nicer house in a good location, I would steer clear of those companies.
Yeah really....TR Lawing rents most of crack house looking places near my neck of the woods. I don't recall ever seeing one of these rental properties that I thought looked decent.
DO A BACKGROUND CHECK! Be thorough with it. Require one month's rent as a security deposit and the first full month's rent before you turn over the keys.
Get a good lease. You may not need it but you will wish you had a good lease if things go south.
Rent is due on the 1st. It is late on the 5th. Eviction papers are filed on the 10th. Always. In my experience, if a tenant falls behind more than one month, you're about 50/50 in getting them back on track. Two months or more behind, the odds are not in your favor of the tenant getting caught up. Its not worth the hassle trying to chase someone down for rent when you can turn the house and get someone to pay on time.
In your lease, make sure there is a waiver on the 10-day notice. This states that you do not have to send a certified letter demanding payment (pay or quit).
Take emtion out of the picture. Know going in that any tenant is not going to care for your house the way you do or did. It is not theirs and it will show at some point or other.
You can rent your house on your own and without the services of a management company. But, know when to say when and go with a pro. This may take 2 months with no tenant or it could take 2 weeks. That is a personal thing, but you will know when you should throw in the towel and let someone with experience come to your rescue (for a percentage each month).
Do not (DO NOT!) let the tenant pay their last month's rent with the security deposit. You will regret that in about 90% of cases. Your response, "No!"
I am now an expert in paying Rental Ordinance Violation (Article XII s.6-580) fines. It basically states, if there is a police service call you are out of pocket $335. Any crime, disturbance, noise, everything except spousal abuse, will cost you, the landlord - $335. I am still upset over mine, especially since the city retroactivelly applied the law to my property, ignoring Ex Post Facto clause of US constitution. City's in-house layer team looked over my case and bet that I will not sue. They are right. My time is more important.
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