Renting out a Townhouse (Burke, Chantilly: section 8, rental, HOA)

[Germany2DC]

Hello,

Just curious if anyone could share their experiences or stories with renting out a townhouse in the area. We are thinking about relocating and putting our townhouse up for rent in lieu of selling because we put some money into the townhouse so it might be too early to sell and it not be a loss. We also have a low mortgage and stand to make some profit by renting out even with having to pay a property manager and income taxes on the rental income. Trying to decide if selling the place might be more beneficial for peace of mind (don't have to worry about bad tenants) and because the market is hot right now or if we should make some extra income and then sell in a few years. Any insight is welcome!

Thanks.

[boyd888]

The way to think about it is if you did not already own it would you buy it just to rent it out? Calculate the capitalization rate and see where the money falls too. If you get good tenants of course it can be great, but bad ones can make it a nightmare internet articles often fail to mention. Maybe try a one year lease just to see if you like it? You could add in an early termination clause too.

Location is as usual a big factor. Are we talking a townhouse in Clarendon that's gonna rent for $4K a month or something in like Chantilly you might bet $1500 for?

[Hal Roach]

If they have a pet, a surname ending in a vowel, or a bumper sticker with the name of a washed up Lefty. Give it a miss.

[Germany2DC]

Originally Posted by boyd888

The way to think about it is if you did not already own it would you buy it just to rent it out? Calculate the capitalization rate and see where the money falls too. If you get good tenants of course it can be great, but bad ones can make it a nightmare internet articles often fail to mention. Maybe try a one year lease just to see if you like it? You could add in an early termination clause too.

Location is as usual a big factor. Are we talking a townhouse in Clarendon that's gonna rent for $4K a month or something in like Chantilly you might bet $1500 for?

It's in Burke and with some of the upgrades we put into it, we could probably get the high end of the rental price range for the area considering that most rental TH's in the area have very dated kitchens, bathrooms, etc.

[Hal Roach]

Take monthly rent.....subtract 40% for expenses.....take the other 60% and subtract principle and interest...what is left is you positive flow. Some even use 50% for expenses. 2000 per month....40% per year would be 9600....commissions 2000, vacancy 2000, taxes 3000, insurance 500, HOA 1200...leaves you 900 a year for repairs without professional management...60%...14,400 per year...leaves you 1200 per month for P & I....I would say unless you owe less than 150k, dump it. If you think you will retire in NoVa...have your head examined.

[BOS2IAD]

We had to rent out our townhouse for 3 years when we traded up as it was a buyers' market at the time.

Be sure to hire a good management company. We went through 2 companies. The first company had a ditzy woman manage our house. For a so-called "expert", she was clueless.

Ask the company you hire how they handle sending you the monthly rent check. The first company wouldn't send the money until the tenant paid them. The second company told us that the money would get to us on the first of the month even if the tenant had yet to pay. Be sure to ask about that.

If you know your neighbors, let at least one of them know that you're renting out the house. Give them a business card from the management company. So if you end up with crappy tenants, the neighbor has a place to complain.

A good management company will screen potential tenants and do a credit check. They will also let you know if any maintenance problems come up.

BTW, if you don't want any smokers renting the house, let the management company know that. I don't know if this is still done (we rented out our townhouse in the late 90s) but we were asked if we wanted any Section 8 tenants. We said "no" and signed a form stating that.

In our townhouse community, we had one family rent out their house while they were in Germany. When they returned home, they ended up selling the house.

[Hal Roach]

Seen very few do it in residential, but a "Triple Net Lease" long term would be good for...ten years or so....tenant pays taxes, insurance, maintenance.....could be administered by account servicing department of escrow company.

[Gaylord_Focker]

Originally Posted by Hal Roach

If they have a pet, a surname ending in a vowel, or a bumper sticker with the name of a washed up Lefty. Give it a miss.

So you would rent to a Rendon over a Burke? Cool.

[Hal Roach]

That is a silent vowel and would be an exception, and somewhat unusual. Burke started out as Burgh. And yes, I do check name origin on contracts I look at, if they don't have a cat, or Leftie bumper sticker, and do have a 720+ FICO.

[Gaylord_Focker]

Originally Posted by Hal Roach

That is a silent vowel and would be an exception, and somewhat unusual. Burke started out as Burgh. And yes, I do check name origin on contracts I look at, if they don't have a cat, or Leftie bumper sticker, and do have a 720+ FICO.

Gregorio?