Renting out a townhouse. Can I do on my own or go with an agency? (rentals, HOA)

[Mystery123]

I'll be moving into a single family house soon and want to rent out the townhouse to see if it's worthwhile instead of selling it.
Can I do on my own or go with an agency?
What are the things to consider?
Credit check, deposit, HOA issues, contracts etc...
Thanks for comments.

[JD401]

Paying an agency 8% is worth it to me.

[davebarnes]

Hopefully, an agency will make sure that "all the boxes are ticked".
For example, now that you are a landlord, you need a new homeowner's policy.

[SkyDog77]

It all depends. I don't like paying agencies for my rentals, but I don't mind fixing things myself. I have lots of tools, am fairly handy, and I know contractors that I can call for a reasonable price if things are above and beyond what I want to deal with. I also don't mind sorting through tenants.

Factor in at least one month's rent per year for vacancy and maintenance, subtract another month's rent if you are going to go with an agency, then decide if it's worth it.

[infinitylove]

You can do it yourself. Make sure you screen tenants and do a background check. Check for evictions. Make sure not to discriminate. The first person to meet your requirements gets the house. Do walk thrus with the tenant and take picures. Collect rent and security deposits and have a signed lease. Make sure your lease is very clear about everything. You can't be too obvious. Be prepared to take phone calls in the middle of the night, unless you "train" your tenants. It is easier to keep the water bill, HOA bill and the things that stay with the house in your name and collect the money from the tenant or add to their rent. Have them put the other bills in their name. Find a good handyman that can be on call or become one yourself. Don't mess around with late payments. Be firm. Set the precedent up front. There are "professional" tenants that know how to work the system. Learn your rights and your tenants rights. Be nice to your tenants. Being a landlord is doable, but it will also depend on how much you want to be involved. Spell everything out and put it in the lease so there are no questions about anything! Good luck!

[dude_reino]

You don't need an agency, just use craigslist to find someone. Use a third-party company to do a background/credit check. Then download a sample lease and make modifications (for example put in something that makes them responsible for following HOA rules, and that any violation fines will be passed onto them).

[Mystery123]

Found a company that takes $125 fee per month.
Looking at the expenses and taxes, I may get $300 per month renting out.
But around $115k in bank doesn't even give $30 so it's better than putting in the bank.

Monthly rent will be $1100 more or less but will go quickly at $1k.
HOA: $200
Property Taxes: $100
Rental Agent: $125
Maintenance: $100

That's $525 expense right there per month.

Annual rent: $13200.
One month may go vacant : -$1100
Expenses ($525 *12): -$6300
Total after expenses: $5800
Minus income tax (30%): -$1740
--------------------------------
Total income: $4060 per year = $338 per month.
Hmm...
Yay or nay?

[dude_reino]

Originally Posted by Mystery123

Found a company that takes $125 fee per month.
Looking at the expenses and taxes, I may get $300 per month renting out.
But around $115k in bank doesn't even give $30 so it's better than putting in the bank.

Monthly rent will be $1100 more or less but will go quickly at $1k.
HOA: $200
Property Taxes: $100
Rental Agent: $125
Maintenance: $100

That's $525 expense right there per month.

Annual rent: $13200.
One month may go vacant : -$1100
Expenses ($525 *12): -$6300
Total after expenses: $5800
Minus income tax (30%): -$1740
--------------------------------
Total income: $4060 per year = $338 per month.
Hmm...
Yay or nay?

Is your mortgage paid off? I don't see it listed under expenses. If so, definitely YAY. But, I still wouldn't get an agent. They're taking way too much. I suggest trying DIY first, and if you can't handle it, then get an agent.

Here is an excellent forum with helpful people in your same position: http://www.thelpa.com/lpa/forum.html

[mic111]

Have you accounted for the property management company cost to lease and the insurance?

[Mystery123]

Originally Posted by dude_reino

Is your mortgage paid off? I don't see it listed under expenses. If so, definitely YAY. But, I still wouldn't get an agent. They're taking way too much. I suggest trying DIY first, and if you can't handle it, then get an agent.

Here is an excellent forum with helpful people in your same position: Landlord Q & A Forum

Yes, paid off, thankfully.
Thanks for the link.

Originally Posted by mic111

Have you accounted for the property management company cost to lease and the insurance?

Yes, I forgot the renter's insurance.
I think that will add around $35 per month ($420 per year) to cover inside as exterior is covered by HOA.
So that still brings it down to around $300 in my pocket for $1100 rent or $200 for $1000 rent that I can use towards the new house.

It needs some paint inside and may also have to replace carpet. It's old but not damaged so professional cleaning may work for now.

Not sure about management company's cost to lease.
It may be included in that monthly fee, or not.