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If my vacation rental home doesn't pick up soon I am moving on to plan B.... renting my house for a fixed term of 9 to 12 months (and no right to renew). I want to move back in after approximately a year. Right now I'm thinking about screening criteria and a few other things. Any feedback is helpful.
1. FICO score 700. Do you think that's too high? My house would rent for about 6,500 / month unfurnished.
2. Gross monthly income of at least 2.5 times the amount of the monthly rent per applicant. But could this be too restrictive? What if they're retired and they have most of their money invested? If and when they need the extra income they simply sell off some stocks. So should I have the option to lease to someone who has a certain amount of net worth that is readily available (versus stuck in a retirement account, closed end investment product, non-traded REIT, etc)?
3. No evictions, judgments against you and no bankruptcies in the last 7 years.
I know that anything is negotiable with real estate but would you expect a 1 year fixed-term tenant to be OK with me storing some things in the garage?
Normally are all utilities put in the tenant's name?
Normally does the landlord do all of the gardening?
Asking a tenant to make at least $16,000.00 ($192,000.00 a year) a month will extremely limit the amount...if any...applicants. Why would they rent from you when they can easily buy with that salary? I suggest you research the local rental market and see what other similar properties rent for. Understand as well that you will have to pay taxes on the rent you receive which come out to around $78,000.00 a year.
Asking a tenant to make at least $16,000.00 ($192,000.00 a year) a month will extremely limit the amount...if any...applicants. Why would they rent from you when they can easily buy with that salary? I suggest you research the local rental market and see what other similar properties rent for. Understand as well that you will have to pay taxes on the rent you receive which come out to around $78,000.00 a year.
Not only that, but he is also proposing to ask for income of 2.5 x the rent for EACH tenant. So he could (possibly) get up to 6 max tenants ALL having to have income of $16k a month!? There is no way! Even if it were just 2 tenants that is ridiculous.
OP, you really need to ask for the 2.5 x rent for all tenants combined no matter how many there are. All tenants on a lease are equally responsible for the rent payment anyway so 2.5 x combined should more than cover it.
And with all of that said, I don't think it would be right, or fair, for you to be storing things in the garage especially if it was taking up space that the tenants may need or want plus with them paying that much for rent.
If my vacation rental home doesn't pick up soon I am moving on to plan B.... renting my house for a fixed term of 9 to 12 months (and no right to renew). I want to move back in after approximately a year. Right now I'm thinking about screening criteria and a few other things. Any feedback is helpful.
1. FICO score 700. Do you think that's too high? My house would rent for about 6,500 / month unfurnished.
2. Gross monthly income of at least 2.5 times the amount of the monthly rent per applicant. But could this be too restrictive? What if they're retired and they have most of their money invested? If and when they need the extra income they simply sell off some stocks. So should I have the option to lease to someone who has a certain amount of net worth that is readily available (versus stuck in a retirement account, closed end investment product, non-traded REIT, etc)?
3. No evictions, judgments against you and no bankruptcies in the last 7 years.
I know that anything is negotiable with real estate but would you expect a 1 year fixed-term tenant to be OK with me storing some things in the garage?
Normally are all utilities put in the tenant's name?
Normally does the landlord do all of the gardening?
Hahahahahahaha I'd need a big rent discount to sign onto that lot.
I've seen yard care handled both ways but I think it more commonly falls on the tenant in single-family rentals.
And I've seen utilities done both ways but more often in the tenant's name. Sometimes the utilities are kept in the landlord's name for continuity (e.g. to keep turned on seamlessly during periods of vacancy), with actual utility costs during term of lease paid by tenant.
Not only that, but he is also proposing to ask for income of 2.5 x the rent for EACH tenant. So he could (possibly) get up to 6 max tenants ALL having to have income of $16k a month!? There is no way! Even if it were just 2 tenants that is ridiculous.
OP, you really need to ask for the 2.5 x rent for all tenants combined no matter how many there are. All tenants on a lease are equally responsible for the rent payment anyway so 2.5 x combined should more than cover it.
And with all of that said, I don't think it would be right, or fair, for you to be storing things in the garage especially if it was taking up space that the tenants may need or want plus with them paying that much for rent.
Tenants together earn 2.5 X rent.
Everything real estate is negotiable. The stuff I am wanting to keep in the garage is related to the house. Example: paints, roof gravel, fencing, lawnmower, pole saw, shovel, box of electrical related parts, box of tiling tools, etc.
Is rent received from real estate taxed at the normal capital gains tax rate?
Everything real estate is negotiable. The stuff I am wanting to keep in the garage is related to the house. Example: paints, roof gravel, fencing, lawnmower, pole saw, shovel, box of electrical related parts, box of tiling tools, etc.
Is rent received from real estate taxed at the normal capital gains tax rate?
That is fine then however, that is not what you said/asked. But you are correct that it would be too restrictive 'per applicant'.
Quote:
Originally Posted by Big-Bucks
2. Gross monthly income of at least 2.5 times the amount of the monthly rent per applicant. But could this be too restrictive? What if they're retired and they have most of their money invested? If and when they need the extra income they simply sell off some stocks. So should I have the option to lease to someone who has a certain amount of net worth that is readily available (versus stuck in a retirement account, closed end investment product, non-traded REIT, etc)?
I just entered some numbers in Turbo Tax. Yeah Uncle Sam wants in on my profits!
I guess everyone is OK with a 700 FICO score requirement. About right for a 6.5K / mo home?
All that matters is if it is 'right' for you and if it works for you! There is no one-size-fits-all in this situation and nothing is 100% iron-clad fool-proof no matter what you do. There are just way too many variables in each situation.
All I can say is start there and see if you can find anyone who meets ALL of that criteria who is also interested in the lease terms, rent, location, etc., etc.
If my vacation rental home doesn't pick up soon I am moving on to plan B.... renting my house for a fixed term of 9 to 12 months (and no right to renew). I want to move back in after approximately a year. Right now I'm thinking about screening criteria and a few other things. Any feedback is helpful.
1. FICO score 700. Do you think that's too high? My house would rent for about 6,500 / month unfurnished.
2. Gross monthly income of at least 2.5 times the amount of the monthly rent per applicant. But could this be too restrictive? What if they're retired and they have most of their money invested? If and when they need the extra income they simply sell off some stocks. So should I have the option to lease to someone who has a certain amount of net worth that is readily available (versus stuck in a retirement account, closed end investment product, non-traded REIT, etc)?
3. No evictions, judgments against you and no bankruptcies in the last 7 years.
I know that anything is negotiable with real estate but would you expect a 1 year fixed-term tenant to be OK with me storing some things in the garage?
Normally are all utilities put in the tenant's name?
Normally does the landlord do all of the gardening?
1. Yeah 700 score is my minimum required
2. I do 3x income combined or single as long as it adds up to 3x. Then I look at DTI. if they fail on that the 3x income makes no difference.
3. I deny any evictions judgements BKs in the past 10 years. Criminal record for the most part is a denial. I have some exceptions. Say the guy was as idiot kid stole a car but is now 50 and clean for the past 32 years yeah I'm gonna chalk that up to stupidity while young.
4. If I'm renting I expect all YOUR stuff to be off the property.
5. That's a real personal thing. If I was looking to rent I wouldn't even look at a one year only lease. I don't want to move that quick. But there are people who are only gonna be on a year long contract or short term housing need. I would target corporate housing needed sites or agents to bring you that specific tenant you are looking for. And you will most likely pay a fee for it.
6.Yes usually utilities go in tenants name. There are some circumstances if the utilities are shared between units you must either disclose the fact one party is paying another's utilities.
7. Well speaking as a tenant I don't want to do your gardening as I don't want to be responsible for damage. For the most part I don't care to do gardening. And I dont feel I should. My job is to pay rent. Maintenance is your job. As a LL I don't want you to do the gardening because I don't know if you are damaging or killing my landscape. IMO it creates issues later. And at what you plan on charging I sure as hell am not going to do gardening.
8. Income from rentals is income. You deduct running expenses. You want expenses to lower the taxable amount. So you want a gardener, plumber, painter etc
Quote:
Originally Posted by Corn-fused
Not only that, but he is also proposing to ask for income of 2.5 x the rent for EACH tenant. So he could (possibly) get up to 6 max tenants ALL having to have income of $16k a month!? There is no way! Even if it were just 2 tenants that is ridiculous.
OP, you really need to ask for the 2.5 x rent for all tenants combined no matter how many there are. All tenants on a lease are equally responsible for the rent payment anyway so 2.5 x combined should more than cover it.
And with all of that said, I don't think it would be right, or fair, for you to be storing things in the garage especially if it was taking up space that the tenants may need or want plus with them paying that much for rent.
Lol good luck with that.
Last edited by Electrician4you; 02-07-2016 at 11:35 AM..
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