My family will be moving in a couple months, and we are having a tough time deciding what to do with our current house. We could sell it and make minimal profit, or we could rent it for a while until the market picks back up.

Has anyone rented out their house before? What are some things I should be on the look out for.

Just some info about the house: It is a 3 bedroom 2.5 bath house located in Cary. Likely tenants would be a family, not a group of say college students or recent graduates.

Thanks.

12/30/2010 9:18:08 AM

Rent it out, and use it as an investment property. Is the mortgage paid off or close to being paid off? You could probably rent it for a little more than your mortgage and make a profit. Also, if you're going to be out of town, you could always hire a property manager or something to take care of the landlord shit like fixing things, etc.

12/30/2010 9:23:28 AM

^This.

12/30/2010 9:28:43 AM

I am looking at the same thing. We are moving to the Triangle and at least for the first year we are just going to rent in Orange County. The biggest problem is I live in a shithole town (Scotland Neck) and I doubt I can get any decent renters. That is what I am most worried about. I probably won't be able to charge much, and I'm afraid I'll get absolute shit renters who won't take care of the place. I've heard its a nightmare to kick somebody out for nonpayment or trashing your place.

12/30/2010 9:57:30 AM

Just have a good screening process.

12/30/2010 1:29:40 PM

I think property managers are good for something when you don't live in the same town...but at the same time I DO NOT trust them in finding good tenants. They might do a great job in everything else, but they will do all they can to fill that house up as soon as possible. So even if you are moving away, I would require to meet any tenant that will be in that house.

I was going to rent out a room in my house to a random person last year, and I met all applicants at a local coffee shop and had about a 30-minute conversation with them before heading over to the house.

12/30/2010 2:59:38 PM

Are you sure your mortgage doesn't prohibit renting?

12/30/2010 3:01:44 PM

^^^ No blacks or mexicans

12/31/2010 1:40:25 AM

^^^ "only '10s'"

12/31/2010 9:59:44 PM

Definitely look at your lending language. We are in the market for a new home and have also thought about renting out our townhouse. Our buying agent told us right away to look at the language as many lenders have changed due to the market. She and her husband were going to rent out their home, but needed 6 months mortgage covered on both homes to qualify. Other lenders they looked in to wouldn't allow it based on distance btw the two homes, or at all.

1/1/2011 10:06:48 AM

^^

I've personally never encountered any of the serious roommate problems (such as paying rent...the most serious one).

But once I got out of law school everyone and their grandma was contacting me about helping them get their tenants to pay rent. I probably filed 10 landlord/tenant suits in small claims court in my first year of practice. You have to be really careful these days with the way the economy is. I have a couple friends who are property managers and they say that about 25% of their properties are encountering problems with tenants failing to pay rent.

Get you a good lease, pay for the background check, try and get a 2-months rent security deposit, and don't hesitate to file an eviction notice if they don't pay one month.

1/1/2011 12:30:08 PM

renting sounds better since not much is selling right now. It is hard to find good renters but it sounds like the area would attract a family. I would rent and see how that goes. If you can't or have problems then think about putting the house on the market.

(I rent out part of my house because I don't want to sell it, and live in Gboro part of the time)

1/4/2011 12:10:25 AM

no cosigners

1/4/2011 8:46:05 AM

Quote :

"She and her husband were going to rent out their home, but needed 6 months mortgage covered on both homes to qualify."

6 months mortgage covered as the equivalent amount of cash in the bank? On *both* homes?? I suppose I could see that being a stipulation for the home you intend to rent out (though I personally would be averse to signing a mortgage with that kind of language) but why on earth would you have to have 6 months of mortgage cover on your primary residence in order to be eligible to rent a secondary one? I can't see what difference it would make, unless your primary source of income would be rental proceeds.

As to the OP question, it sounds like a good idea to me. I have a friend who rents out his townhouse as he found himself in a similar situation, and some family members who are looking into it as well. Hiring a property management company is a smart move if you're moving more than a short drive away, as you don't really want to have to hire a plumber/electrician/carpenter/handyman to check out every little issue that the tenants can't self-diagnose. And, unless your timetable would be prohibitive, I'd insist on personally screening tenants. If you can't do so in person, at least have a nice long conversation with them on the phone. These people will be living in your house, it behooves you to be choosy.

1/4/2011 12:09:50 PM

Quote :

"I can't see what difference it would make,"

The reason is due to a tactic that's becoming more and more common. Let's say I own a place now that I bought during the housing peak. I'm about 100k underwater but otherwise financially solvent. I could buy a comparable place for 100k less than what I paid, but I can't sell my existing house because I don't have the cash to cover the balance of the loan with what I can sell it for.

So I buy a new place, claim that I'll rent the old one out, and after I close, I can just stop paying the mortgage on the old place and let the bank foreclose. Sure my credit is fucked for the next several years, but now I have a markedly lower mortgage payment, and 100k less in liability. The fucked credit is a small price to pay.

anyway, so that's why lenders are starting to require 6 months worth of mortgage in cash (or equivalent) for both homes.

1/4/2011 2:56:25 PM

Even if you aren't underwater I wouldn't suggest taking on an investment property if I you don't have 12 months mortgage stashed somewhere.

1/4/2011 4:11:00 PM

rent it.

get a good property manager.

meet all tenants.

visit property & manager often.

1/4/2011 5:44:44 PM

^^^ Borrowers should just start pulling the Lehman Repo 105 scam on banks. Go to your local banks and take out personal loans for the cash the other banks wanna see, get new home loan, pay back personal loans immediately, default on old home, profit.

The sad thing is, when a bank does this it's just bankers figuring out loopholes in the regulations...when citizens do this, it's fraud and will likely come with some sort of hefty fine and possibly jail if its serious enough.

[Edited on January 6, 2011 at 7:08 AM. Reason : lollerskates, that wont work because the bank will pull your credit file...]

[Edited on January 6, 2011 at 7:08 AM. Reason : so borrow the cash from relatives]

1/6/2011 6:57:45 AM

test for old school posting

1/23/2011 7:04:47 PM

I rent my downtown Raleigh condo out and do it all on my own. I originally hired a property manager to help rent and manage the properties but they dragged their feet for 2 months so I fired them and took it over after consulting with someone who has rented properties for a long time.

I am very lucky - I have wonderful tenants and it's been a good first year. Only downside is that the HVAC unit died in September and had to be replaced.

PM me if you have any questions

1/23/2011 8:59:27 PM

Did you have to sign anything with the property managers which prevented you from replacing them until a certain time period has passed?

1/23/2011 9:16:12 PM

The contract I signed with them was that I could end the contract at any time prior to them finding a tenant.

I wouldn't have had to pay them until they found someone.

1/24/2011 8:38:30 PM

If you can sell it and break even, go for it. We're renting out our house for slightly less than the amount of the mortgage after it was on the market for over a year (lowered price to below tax assessment) and sat vacant for 10 months. We're using a professional management company that takes 10% each month, and have yet to see a rent check that doesn't have BS maintenance charges taken out of it, like $45 for a running toilet and $85 to pull carpet staples out of the hardwood floors and paint behind the kitchen sink. The flip side of that is when we did decide we had to rent it, it still took 3 months to find tenants so be sure to account for the house sitting vacant regardless of what you decide to do and don't wait until the last minute to try to rent or sell.

2/7/2011 7:36:21 PM

Quote :

"$45 for a running toilet and $85 to pull carpet staples out of the hardwood floors and paint behind the kitchen "

Wtf kind of crap is that?

2/7/2011 8:37:53 PM