Buying a 2nd house rather than selling & buying? (Riverhead: real estate, foreclosure)

[Jennifer06]

Has anyone done this? Have you rented out your first home and, if so, how did that go?

Since I'm so reluctant to sell and such a loss and I do love our house so much, I've given this some thought. We have a fine down payment, but wouldn't be able to support two mortages.

I keep thinking about how in the future I'll love our home in Riverhead even more. Seems so unwise to sell, yet it's not a SD I want to be in now.

Or we could rent out our house when we're ready to move and rent elsewhere rather than buy. Such a bummer we bought when it was all high and now it's low.

[TeamExit]

i think its a great idea, but theres always going to be drawbacks and things to consider..

1. have to be able to rent it for enough to at least break even on the mortgage payment
2. chance of getting stuck with a horrible tenant who stops payin, trashes the place, wont leave, etc
3. chance of not getting a tenant for a few months, and having to support both mortgages
4. the mortgage is probably taken as your primary residence, and u would now be making it a rental property

[alexei27]

Originally Posted by TeamExit

i think its a great idea, but theres always going to be drawbacks and things to consider..

1. have to be able to rent it for enough to at least break even on the mortgage payment
2. chance of getting stuck with a horrible tenant who stops payin, trashes the place, wont leave, etc
3. chance of not getting a tenant for a few months, and having to support both mortgages
4. the mortgage is probably taken as your primary residence, and u would now be making it a rental property

#2 can make your life a living hell. If you do go that route...get references...call their mothers...whatever you have to do. Tenants have a lot of rights and have to be pretty horrible before you cam kick them out.

Not saying you shouldn't do it...on the contrary. Just make sure you aren't leaving your very important investment in the wrong hands.

[okaydorothy]

We did that. Luckily we bout our first home in the 90's when prices were low.

But it has been a hell of a ride with tenants. Number one tenant lived there for 2 years, trashed the place and we redid the house after bringing her to court to have her evicted.

Number two tenant, just decided in Sept that she wasnt going to pay some of her rent, did the same in October, didnt pay anything in Nov, was supposed to be out by court order on Nov 30th and guess what ; she is still there. I am waiting for the transcript to bring to the sherriff.

If your mortgage is high, I would take the bath and try to sell it for whatever. Being a landlord is very stressful esp if you are dependant on that rent payment coming in.

d

[TomMoser]

Originally Posted by TeamExit

i think its a great idea, but theres always going to be drawbacks and things to consider..

1. have to be able to rent it for enough to at least break even on the mortgage payment
2. chance of getting stuck with a horrible tenant who stops payin, trashes the place, wont leave, etc
3. chance of not getting a tenant for a few months, and having to support both mortgages
4. the mortgage is probably taken as your primary residence, and u would now be making it a rental property

#1. Usually whole house rentals do not break even on rent if they were bought recently.

#2. It happens. Be very careful who you rent to. Make sure that they are thoroughly screened, including a credit report. If they don't pay Verizon, they probably won't pay you.

#3. Again, a draw back of whole house rentals. They are either 100% occupied or completely empty. This is one of the reasons why I prefer multifamily homes if you are going to become a landlord.

#4. This is not an issue. When you took out the loan it was your intent to live in the home and you actually did so. Turning it into a rental now will not violate anything with the bank.

[TeamExit]

Originally Posted by TomMoser

#4. This is not an issue. When you took out the loan it was your intent to live in the home and you actually did so. Turning it into a rental now will not violate anything with the bank.

that is good to know

[I_Love_LI_but]

Originally Posted by Jennifer06

We have a fine down payment, but wouldn't be able to support two mortages.

I would say you answered your own question right there. If you cannot support two mortgages, it would be too risky to be responsible for two mortgages.

So many people (always NON-landlords) think renting property equals "money for nothing" and landlords just sit around and cash checks all day. It's not that easy and anyone who plans to be a landlord should be able to pay their mortgage no matter what the tenant situation is or risk foreclosure, bad credit, etc.

Even the best-screened tenant with stellar credit, especially in this economy, could lose their job through no fault of their own or have another financial emergency and not be able to pay the rent. Then where do you stand?

As for the school district, if you don't like it, then why did you buy a home in it? It always amazes me how lax people can be when it comes to investigating the SINGLE MOST EXPENSIVE THING ON YOUR PROPERTY TAX BILL and A MAJOR FACTOR THAT ALSO TENDS TO DETERMINE PROPERTY VALUES POSITIVELY OR NEGATIVELY: THE SCHOOL DISTRICT THE HOME IS ASSIGNED TO!

[Diane Giam]

It may cost less to find a church related private schools, as those are cheaper than Private schools, then to go into doing all those things, renting, etc. That may send you to the poor house.

Diane G

[AndreaII]

I would definitely not advise renting, having been there and done that out of necessity, not the way to go. On paper it sounds great; realistically you'll probably lose money and end up with lots of aggravation. These days tenants know their rights and they know the law covers them beautifully and hardly covers the landlord at all, at least in NY state.

Screening tenants can be tricky even when done by the book. Their credit score can be good, they can be gainfully employed, etc. But the bottom line scores are no indication of their true character. They all put their best foot forward, and then after you sign on the dotted line the "real" tenant comes through. I ended up with people who seemed so refined when I first met them after taking about 4 months looking for decent tenants, both well-educated (Ph.D's), respectful, etc. Once I signed the lease, uh-oh. Immediately the demands ensued, they caused a legal dispute before they moved in, gave me nothing but trouble during their stay, lots of damage caused by them (excuse being, "the house is 50 years old, things break) in a house ship shape - too good for them actually. And then in the end they tried yet again to cause another legal dispute so they wouldn't have to move at the end of the lease (saw through them and it backfired on them). Very litigious people - had to be very careful when talking/dealing with them. Almost anything could have landed me in court. Would you really want to have to deal with people like that?

Landlording is real work - almost like babysitting; you never know what those tenants are going to do next. Or ask for next. Or demand next. Or break next. Or complain about next. What would you do if your tenant calls you up and tells you the stove died and doesn't work? Mine did that after they pulled the plug out of the wall first. Anything to cause a problem. We incurred thousands of $ of damage just from their kid alone, who they NEVER supervised, and said the damage was there when they moved in. Total lie. But you have to expect it, they're tenants who don't care.

And, btw, they're still out there renting in Greenlawn now.

Hope you make the wise decision.

[mathjak107]

i would never be a landlord again , ever,.... even longer...20 years in residential real estate as a lanlord is enough for me...