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I own a condo where I now live but am considering moving about 300 miles away. The condo is in a very up and coming area (city center) and is appreciating quite nicely. My delimna (sp) is that I would like to rent it out as it would fetch enough to cover my mortgage - and then some - however I live in a highly transient area. People are constantly moving in and out due to the military. My neighbor moved recently and rented out her unit next door and I must say the tenants are the worst ever! They bang on the walls at night, have broken the screen door.. I could go on and on. In addition, there is a company who is handling the rental of this unit and I am pretty sure they are having issues. There is now one of those lock boxes on the door so I am thinking it may be going up for sale soon. All of this is steering me away from renting mine out but I really would like to hold on to the unit if possible. Any and all ideas and suggestions are much appreciated.
I own a condo where I now live but am considering moving about 300 miles away. The condo is in a very up and coming area (city center) and is appreciating quite nicely. My delimna (sp) is that I would like to rent it out as it would fetch enough to cover my mortgage - and then some - however I live in a highly transient area. People are constantly moving in and out due to the military. My neighbor moved recently and rented out her unit next door and I must say the tenants are the worst ever! They bang on the walls at night, have broken the screen door.. I could go on and on. In addition, there is a company who is handling the rental of this unit and I am pretty sure they are having issues. There is now one of those lock boxes on the door so I am thinking it may be going up for sale soon. All of this is steering me away from renting mine out but I really would like to hold on to the unit if possible. Any and all ideas and suggestions are much appreciated.
I listed my place for rent when I moved for work. Here are just a couple things I learned that you may not have considered:
It takes more than 3 months to evict a squatter
Don't ever accept a tenant who wants to move in today or tomorrow.
No less than a 650 credit score is acceptable
Have a lawyer on retainer before you begin
Plan on a 20% loss due to vacancies and remember to calculate any advertising costs into your final figures.
Tenants won't take care of it like you do. They don't care about your property value.
Are you up to managing a property from 300 miles away?
When its time to sell are you prepared to make the trip back and put in the 80+ hours to get it market ready?
I live in a higher crime area and without a pool of good tenants and in the end, way too risky for me. If you live in a major city with a large pool of decent tenants, it might not be so bad. But you will need to be savy about weeding out the professional squatters without breaking any fair-housing laws. And professional squatters seekout inexperienced home-owner/landlords. But if you rent it yourself, you have more flexibility than a management company--who will follow the letter of the fair housing law.
I have found that even when paying a management company being a landlord can be work. It seems that less than half of renters are long term problem free tenants and the rest present regular problems.
Many properties are only good investments because the depreciation and write-offs allow you to hold for long term appreciation, but current cash flow is often not positive if the home is financed. I would approach the prospect as a serious business and do a real budget before jumping in.
If you choose to rent out your place take photos and/or video of what the place looks like and what condition it is in BEFORE you rent it out. You may need it as evidence in a lawsuit against the tenants when they thrash your place.
I own rental properties and I have property management companies for my properties. For the most part the companies I have used are good and reputable, however one of them apparently was not and failed to go in and inspect one of the properties at the designated intervals. One home in particular was a brand new home that had never been lived in. The tenants thrashed the home to the tune of $12,000.00. I had to sue both the tenant and the property management company, but the tenants don't have any money to pay on the judgment - they're renters!!! It's going to take them forever to pay on this judgment, yet I had to lay out the $12,000 up front to have the home repaired so it would be habitable again.
My personal residence is for sale and I am moving to another home. I would definitely NOT rent out my personal residence as I have too much invested in it for some tenant to tear it up. If it sits on the market for a while vacant while I make the house payments, so be it. I am not willing to have someone in there thrashing my personal residence.
Just take into consideration what others here have advised, and keep in mind that even though a credit and reference check can be done, you can still get a bad tenant.
Based on what you said, I think you'd be better off selling than renting.
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