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In lease....And when leaving town in the Winter...thermostat must be set
to XX degrees so pipes do not freeze.
(Haha, not turned OFF! For 2 weeks in the coldest cold snap ever!)
I couldn't agree more with this. I think the OP still has an emotional attachment to the rental which is why they aren't liking being a landlord, lets be honest it's free money there's no reason to not like it. You have to separate your emotions from your business and if you did that you would be much happier. You have insurance which will cover any potential property damage stop worrying about the what ifs you pay for that every month with premiums
One thing you can do to increase renewals, assuming you try another year at it, is to do minor increases in rent with a discount for a 15 month option. I send out a letter at the 60-75 days remaining which break it down but because I have so many units if I have too many coming up in the same month I offer 10/11/12/15 month options to try to stagger them out. I do offer month to month but there's a 30% premium and no one ever takes it.
It is free money, from cash in hand to the principal reduction its thousands a year on a single property, if you can emotionally seperate yourself from it. It's a better return on investment, which at this point would be your capital gains if you were to sell which also has tax consiquences now, than you will ever get anywhere.
Thank you for the suggestion of the 30% premium for month to month.
I have to say I don't see myself as having an "emotional" attachment - I think it's just more a concern that the property stays in decent shape so we can attract buyers (or tenants if that were our goal), and not be doing big repairs, covered by insurance or not, that will delay us moving forward. For me, it's more the stress of long-distance that's brought us to the conclusion to sell, but we are well aware of the tax benefits - it was one of the reasons we did rent out rather than sell last year.
CajunCountryGal, I would have loved to have seen your post 3 years ago, when my husband got the word we had to move to CA from FL. We loved our house in FL, but we bought at the almost peak in 2005, and we would have lost a bundle if we sold the house, even though we were not underwater. We have a property manager, but I still find myself handling a lot of things myself, maybe just because I like to have some control over the situation.
- Your comment about requiring the tenants have us named on the renters insurance, complete with dog bite coverage, is a MUST! Our previous tenants had multiple dogs (much more than were allowed on the lease) and in one day, one of them bit another resident, and later one ran out of the house off leash. I was panicking that we'd be sued as the landlords. Thankfully, the resident just wanted to report it to the HOA, and we got a subsequent fine (which we passed on to the tenants as taking out of their security deposit). We got lucky this time. I am going to require us being on a policy of the renters and have them show proof.
- The length of a lease is a tricky one. We were all set to renew with these tenants (our second ones), and we were just before 30 days notice when the dog bite happened (and the tenants tried to deny it was their dog until we told them we had pics and a witnessed confession from their son, who was walking the dog, who was also not on the lease). Had we renewed, it would have been more of a pain in the neck to get them evicted, even though they broke the lease on numerous accounts (multiple pets and people not on lease). Unfortunately, we got rid of them, but now have the expense of the prep before new tenants and paying realtor's commission again. In our case, we had to replace all the carpet in the house because of the tenants dogs (up to 6 at one point, according to facebook ) and repaint the entire interior because of excessive holes and scuffing. Yes, we claimed some of their security deposit, but even charging 30% of new carpet cost and 50% of painting, the tenant was nasty and threatened our property manager, saying that we were scamming them. (Funny, the ones who point fingers and accuse are the ones guilty of doing sneaky things in the first place.) So is it better to have a longer lease? Not sure. Timing is important though, but really, houses get rented and sold at any time of year. I'm worried we missed the summer season where people rent before the school year starts up again.
- We did have in our lease about showing the house to potential new tenants (or buyers, if we went that route) but the tenants were in no obligation to comply. Especially after they were upset that we didn't renew the lease, we figured they would make our lives a living hell and chose not to show the house until it was vacated. Unfortunately, that wasted a month.
I think for anyone considering to rent their house out with a similar situation, you have to realize there are going to be certain costs associated with doing so. And realize people will just not take care of your home the way you did. I have also talked to other friends who have rented their homes out when they moved, and each one has had issues with tenants sneaking in multiple pets and people.
Also, for anyone considering this, make sure to get as much background information as possible. For example:
- One potential new tenant did not want her boyfriend listed on the lease, as he supposedly had issues from bad investments and a divorce that would not show highly on credit report. He also had a "16 year old" son. Well, our HOA requires a credit check of all who are over 18 living in the house, and another HOA turned up that he had multiple speeding tickets as well as an incident where he backed into community property. Our previous tenant before the last ones had multiple community speeding tickets, and after the first warning, the owner gets the fine, not the tenant. The other HOA had turned them down, and between figuring ours would as well, we said no thanks. Oh, and I did some searching on my own, and discovered the "16 year old" was really 19. Another case of tenants trying to be sneaky. Next!
We have also had potential new tenants want us to put a heater in our non-heated pool/spa, or put in a fence around the property for their dogs. Another potential tenant needed to know if there were ever any roof leaks/water damages in the house since he was extremely allergic to mold. (Scratch that one, we had a couple of roof leaks.) Even the last tenants wanted us to convert an outlet in the garage that specifically said "no refrigerator to be plugged into this outlet" to one they could plug a refrigerator into. Uh, no. There is already a fridge inside the house.
Thanks FLSkater - I'm glad to know there are others in similar positions. And I'm glad you and others have mentioned that not all hope is lost if we don't get it sold by a certain time of year. We do have the resources to keep ourselves afloat if we have to wait for a buyer, but are pricing it competitively so hopefully we can get it sold in a timely fashion. I do hope you all find some good tenants, too - all the unknowns really do make for a stressful situation. Best wishes!
Okay, that's fair, but since you're experienced, how do you do showings or work the changeover period from one tenant to the next? Do you not try to do showings or list the place at all when tenants are still there and just plan for the place to be vacant for a month or so while you work to find new tenants?
Like I said, there is already a clause in the lease agreement which does allow for showings in the last 90 days (as does my current lease agreement as tenant, and at least one other past one I had). Is this not the norm? Every time I've gone to look at places, as either a tenant or buyer, I've looked at some homes where tenants are still living there and in some cases where there are key boxes. So I'm not trying to micromanage - I'm pulling from my past experience. But if for some reason I've only seen the abnormal cases, please let me know.
I have never heard of or seen a lease that says a landlord can come and go and show the place whenever they want for the last 90 days of a lease. This includes WA, TN, CA and Mexico. Maybe it's "standard" where you live. But, "standard" doesn't always mean legal or without problems, in my experience.
I learned quickly to never show a unit until it was ready to move into. For several reasons. One, someone looking at a place wants to envision their own furnishings in the unit. If the current tenant is a slob, or just has ugly furnishings, etc., the prospective tenant will be turned off by the unit. Most people can't see beyond a mess or ugly stuff, to visualize the unit empty and clean and newly painted, etc.
Also, you risk the current tenant's stuff getting stolen.
And, even if it's empty, but the carpet hasn't been cleaned yet, and the heater is taken apart because it's being repaired, etc., and the prospective tenant sees the unit like that, invariably, they will be imagining problems after they move in. I've had prospective tenants insist on seeing a unit before it's ready, and I told them explicitly that it's not ready, and all the work will be done in time, blah blah. And every single time, the tenant went on and on about "You're going to have that done in time, right?" And, after they move in, they imagine problems that aren't there. Every single time.
The problem is that their perception of the unit is of a unit that is messy, dirty, unfinished, needs repairs, etc. And that perception sticks, even on move-in day when it's all clean and repaired and painted. In their minds, they have moved into a dump. And they will call you regularly with minor "problems." "I think I hear dripping" (that isn't there), "Do you spray for bugs, I think I heard one in the kitchen (no bugs)," etc.
So, you'll have a lower maintenance tenant, too, if they see a clean, freshly painted place with everything working and put together, the first time they ever lay eyes on the unit.
We anticipated a turnover of 1 month, but normally had someone moved in more quickly than that.
And, if you have the place up for sale, the current tenant is not going to be cooperative, and they may decide to let prospective buyers know about every single thing that is wrong with the place. They could also have a case for your disturbing their quiet enjoyment, if you are disturbing them regularly with realtors for 3 months. This is their home. If you want them to be cooperative, you should offer to pay them for every showing, or deduct rent for those days. But, honestly, the odds of you getting that place sold with a tenant in place are slim. Why deal with an unhappy tenant for 3 months? Or deal with a tenant claiming their diamond tiara was stolen by lookie-loos? Just get them out and get it sold.
As far as smoke smell, if your lease says they can't smoke in the unit, and the unit smells of smoke when they move out, you just deduct from their security deposit the cost of getting the smell out of the unit. How would you know if the smell came from smoking inside, or outside on your property, or in their car down the street, and the smell was just carried in on their clothing? Just say no smoking in the unit. You can't cover every possible scenario.
Again, try honestly to put yourself in the shoes of a prospective tenant. Try to erase completely from your mind anything else, like something being standard, and you heard of someone getting burned, etc., etc. Look at the lease from the perspective of a great tenant who has plenty of other options. If you put in that lease they can't do this, and they have to do that, and if they wear blue eyeshadow they have breached the lease, etc., then normal reasonable tenants with other options, will go somewhere else.
As far as month-to-month leases. I only used these. The thing is, if a tenant wants to move and break their lease they will. But, they may first try to make the place seem uninhabitable, so you will just let them out of the lease - rather than being honest with you. So, what happens is, out of seemingly nowhere, you have a tenant complaining about backing up toilets, and leaking this and that, and bugs and rats, and electrical problems, on and on. You find yourself paying repairmen to go constantly to the place, and a tenant threatening to call the building inspector, etc. And you're wondering what the heck is going on? If they were on a month-to-month agreement, they'd just have given you 30 days notice and moved.
So, in my opinion, just because you have a lease that says they will pay you rent until whenever - that may not end up being reality. And it may have cost you a bunch more in ghost repair problems than if you'd just let the tenant go.
And depending on where your rental is, there may not really be a bad time to get it rented. I was able to get units rented even over the holidays. So, that just depends on your location.
Anyway, of course you have lots of good reasons to do what you want to do. I'm just telling you what I learned. Maybe it will be helpful. Maybe not. Good luck.
my last landlord insisted on showing our house while we were packing for a cross country move. boxes galore everywhere. Only paths to walk through down hallways from all the boxes. I'm sure that was fantastic on prospective tenants!
No way I would sign a lease that says I have to let the house be shown while I'm living there at all. What a terrible privacy violation and an affront to a renter that pays for the privacy of their own home without strangers traipsing in and out at random. I have to admit I would be utterly offended.
The renter's insurance makes sense though and the alarm too and bundled with rent is a great idea. These things protect you and are smart. Hope you can sell your house quick enough :-)
This is a very interesting thread. We are homeowners who are considering renting a desirable, luxurious house for 3 or 6 months, longer if the rent price is favorable (while still keeping my house and getting it ready to sell), and I hope to find a thread similar to this one from a renter's point of view.
Until I do, could someone on this thread suggest some pointers for us?
We are nonsmokers (and have no friends or family that smoke—indoors or out), no pets, no children or grandchildren, extremely clean, quiet, have excellent finances and references, have no pets, etc. We would be literally "the perfect renters," and we want to ensure we get a perfect landlord and a great rental.
What should I look out for?
Anyone here have a super executive house in a desirable location they want to rent out at below market rates? We might be interested in purchasing, ultimately.
This is a very interesting thread. We are homeowners who are considering renting a desirable, luxurious house for 3 or 6 months, longer if the rent price is favorable (while still keeping my house and getting it ready to sell), and I hope to find a thread similar to this one from a renter's point of view.
Until I do, could someone on this thread suggest some pointers for us?
We are nonsmokers (and have no friends or family that smoke—indoors or out), no pets, no children or grandchildren, extremely clean, quiet, have excellent finances and references, have no pets, etc. We would be literally "the perfect renters," and we want to ensure we get a perfect landlord and a great rental.
What should I look out for?
Anyone here have a super executive house in a desirable location they want to rent out at below market rates? We might be interested in purchasing, ultimately.
Well, I am guessing you're joking. But, in case you aren't, put yourself in the shoes of the landlord. What's in it for the landlord to rent a desirable rental to you for only 3 or 6 months at a rent less than the market will bear? And then take on the expense to turn it over again in that short time frame?
Even if you leave it in perfect condition, a landlord can normally expect to lose a month's rent in-between tenants. This is why short-term rentals are normally significantly more expensive than long-term ones. It takes quite a while to make up a lost month's rent.
You might do better to sign a year lease that has a termination clause in it you can live with. But, unless there isn't decent competition for tenants, a landlord isn't likely to rent their luxurious, desirable unit for under market rates.
And how to you find a perfect landlord? All you can do is minimize your risk of a bad landlord, really. So, is the place kept up? Do they respect your time as far as returning your calls and showing up to appointments to rent the place? Do you like their personality? Is the lease fair? Can you talk to previous tenants or neighbors to ask if they like the landlord? If it's a corporation or a property management company you can check BBB or yelp reviews. Although, those aren't very reliable from my experience. But if they have an office, you can go hang around the office a bit to see how they conduct business.
I am now retired and a renter. When I am looking to rent an apartment, I go ask tenants how they like living there. After I go to my appointment to view the apartment, I then walk around the building and talk to tenants who are coming and going about the management and maintenance.
Well, I am guessing you're joking. But, in case you aren't, put yourself in the shoes of the landlord. What's in it for the landlord to rent a desirable rental to you for only 3 or 6 months at a rent less than the market will bear? And then take on the expense to turn it over again in that short time frame?
Even if you leave it in perfect condition, a landlord can normally expect to lose a month's rent in-between tenants. This is why short-term rentals are normally significantly more expensive than long-term ones. It takes quite a while to make up a lost month's rent.
You might do better to sign a year lease that has a termination clause in it you can live with. But, unless there isn't decent competition for tenants, a landlord isn't likely to rent their luxurious, desirable unit for under market rates.
And how to you find a perfect landlord? All you can do is minimize your risk of a bad landlord, really. So, is the place kept up? Do they respect your time as far as returning your calls and showing up to appointments to rent the place? Do you like their personality? Is the lease fair? Can you talk to previous tenants or neighbors to ask if they like the landlord? If it's a corporation or a property management company you can check BBB or yelp reviews. Although, those aren't very reliable from my experience. But if they have an office, you can go hang around the office a bit to see how they conduct business.
I am now retired and a renter. When I am looking to rent an apartment, I go ask tenants how they like living there. After I go to my appointment to view the apartment, I then walk around the building and talk to tenants who are coming and going about the management and maintenance.
No, I am not joking. Some homeowners and/or landlords have expressed that they don't want to sell during a particular season, for example. Someone suggested they would like to rent out their place for an unusual term. Maybe our needs/desires would fit with theirs. In fact, since we would so lightly live in their property (staying at our own home part of the time, and as I said, we wouldn't even need to use all the rooms, especially bedrooms, as there are only two of us, both educated professionals who were bonded until we retired), we would be seen not only as renters but as house sitters. There are professional house sitters and they sometimes pay absolutely nothing to take care of the properties. I am suggesting that we would pay rent, but expect that as perfect renters (not an exaggeration) we do not want to (and will not) pay full market rates, at least not if it is in the overpriced San Francisco Bay Area (even though rent prices are dropping on luxury rental properties, was just sent an $8,000 rental which was $10,000 mo last month. That's a 20% drop, but Google-walking showed it is near the College of Marin and the streets have 90 min. parking signs and there s no garage! We have to have a garage and off-street parking, not on a busy street.) I am also considering a Vacation Rental, but I don't see the sort of properties that interest me.
I am a long-term, original owner of a smaller home in the SF Bay Area who wants to try living somewhere else (larger, more luxurious, ideally partially furnished, but either way is OK) and who needs to move out of this house in order to renovate it for sale in the coming year before we make a future purchase.
I cannot see myself ever in an apartment again and probably not even a luxury condo. I dislike shared walls. I spent two years in two different apartments when I was 22-23 years old. I hated it.
I will look into termination agreements as you have suggested, so thank you for that.
We are considering not only the SF Bay Area, but many high-end areas around the U.S.
As for losing a month's rent, landlords are losing that already by over-pricing their properties.
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) and repaint the entire interior because of excessive holes and scuffing. Yes, we claimed some of their security deposit, but even charging 30% of new carpet cost and 50% of painting, the tenant was nasty and threatened our property manager, saying that we were scamming them. (Funny, the ones who point fingers and accuse are the ones guilty of doing sneaky things in the first place.) So is it better to have a longer lease? Not sure. Timing is important though, but really, houses get rented and sold at any time of year. I'm worried we missed the summer season where people rent before the school year starts up again. 
And I'm glad you and others have mentioned that not all hope is lost if we don't get it sold by a certain time of year. We do have the resources to keep ourselves afloat if we have to wait for a buyer, but are pricing it competitively so hopefully we can get it sold in a timely fashion. I do hope you all find some good tenants, too - all the unknowns really do make for a stressful situation. Best wishes!
