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experience as an land lord

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bujiatang

Rough_Rock
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Feb 22, 2007
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My wife and I are getting ready to buy a house, and we have been kicking around the idea of buying a duplex to rent out the half we aren''t living in.

Does anyone here have experience as an onsite land lord? Owning rental property? We happened to read David Sedaris'' short story on the matter and its got us a bit scared. We are looking for pros and cons.

Also, any advice on choosing good tenants and avoiding bad tenants.
 

KimberlyH

Ideal_Rock
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Jun 15, 2006
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You may want to post this in a different area, it''s more fitting of the family, health and home section, you''ll likely get more responses there. Admin can move it for you.

As for advice: Check references, check references, check references. Seek out tenants that you know, or are friends of people you know who are trustworthy. Set up expecations from the outset (who does yardwork, who possesses the garage, etc.) . Make sure to create a lease that is legal and binding in your state. Know the laws of your state before making the decision to rent. There is a lot involved with owning and renting properties and you should be prepared to handle everything by the book. Have reserves for unforseen expenses.

Consider outsourcing the property management piece of the puzzle if you do not have a lot of available time to invest into your rental property. They will take a percentage of the rent, but be responsible for all repairs etc. It''s not nearly as simple a task as it might seem.
 

Tacori E-ring

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My husband got up to 15 rentals at one time and is selling them off because he *hates* it. They call ALL the time. They get locked out (one on thanksgiving). Accidently break a window. Trip a fuse. Clog the toliet. Some are reasonable claims but many, ahhh...a PITA. Getting rent can be a pain too. He is getting into buying and selling solely now. If it is the only way you can afford a home then I think it might be reasonable. Just be realistic about how much time and energy you want to put into it.
 

bujiatang

Rough_Rock
Joined
Feb 22, 2007
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91
Part of me really wants to not be a landlord. In the apartment we're in now the roof is leaking through our bathroom vent, the second time this spring. We're good tenents and get along great with the folks here so their on this stuff right away... but I don't want to be the guy fixing the roof all the time.

Someone has to be making money at this rental property thing, but maybe the best way for us to double our money is to fold it and stick it in our pockets. And buy a single family dwelling when we can afford a nice down payment.

I'm really afraid of accumulating more debt, we're paying off our student loans still. I know a lot of people are living beyond their means and borrow piles of money and have upside down mortgages and then lose the house without any equity if they default. And this scares me. I never want to be in that position, I know no one does, but ... I feel like there must be a good way to avoid it happening and maybe make some money at the same time.

If that makes sense.
 

KimberlyH

Ideal_Rock
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7,485
It does make sense, but there is no easy way to do so.

My husband has been renting and "flipping" (he hates the term as it makes it seem like it happens so much faster than it really does) for 15 years. He''s very good at what he does, but it took him years to build up his business and the time, effort and energy invtested is huge. He has great tenants (one property is right down the street from us which is really great as it is so convenient) and really enjoys what he does.

The biggest downfall of the business is that people view RE as quick money and 95% of the time that''s simply not the case. I''d spend some time investigating the laws of your state and city/county and talk to people who have been successful at it. It''s not a bad way to make money, it''s simply not easy.
 

Nicrez

Ideal_Rock
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Jan 21, 2004
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3,230
Owning your own place is the best feeling of accomplishment. Having money come in AND get to have the place you live in is second best feeling. Only issue is, you will have to work for it, and be able to take things in stride.

Growning up my father had many rental properties and leasing properties from commercial to residential. I saw first hand the destruction people are capable of when they do not have a stake in it. I also know that right now in his old age, those same rental properties are either a blessing or curse. You don''t just sit back, they are like your babies. Lots to repair, pay, redo, etc....always. And people''s inconsiderate actions can often make you spend more because they clog toilets, dirty walls, destroy walls and floors. That''s the negative. Plus if you have a real problem, getting them to court and out of your home can be very difficult and the rules are there to proctect THEM, no matter who is at fault. 2-3 months in court and you have to pay a sherriff to get them out, here in NY...not fun.

So my suggestion, not to scare you away, is this: Know who you put in there. Get a credit check, and references from previous landlords. Interview them. How many will live in the space, do they have a job, get a person to contact in case of emergency, get 1-2 months security, or even consider using a realtor or broker, because they can pre-screen. In the end, be patient and know no one will ever care for your property like you will, and consider the income as a trade-off...

Good luck and you can download the landlord regulations for your state online...
 

littlelysser

Brilliant_Rock
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Dec 8, 2005
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1,862
The only thing I''d worry about is that you''d be living right next door.

My FI and I bought half a duplex a few year back and we love the place...and we''ve talked about possibly buying the other half when the current owners decide to sell...

But it is a big undertaking...and I guess the thing that I''d worry about is that I''d be the landlord right next door...just a wall seperating you from a possibly very annoying renter...and it is a person that you''d have to answer to, you know?

Just my thoughts.
 

Finding_Neverland

Shiny_Rock
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Jan 10, 2007
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Date: 3/12/2007 12:52:49 PM
Author: littlelysser
The only thing I''d worry about is that you''d be living right next door.
I had a GF who rented the "old homestead" right next door to her Landlord and he, the Landlord, was a PITA!!

Then when we moved here, the house we found was the same way. The "old homestead" right next door to our Landlord. And she was a B**** with a capital "B". Plus, the house had the "family" pool. The kids, in-laws, and grandkids were always lusting to go swimming in the pool. NO!! We''re paying rent, buying the chemicals, and doing all the maintenance. I DON''T THINK SO!! We moved as soon as our lease was up!!

You could have the same problem in reverse. Your tenants could be PITA''s.

Or you could have the sweetest neighbors and they''d still bother you. Even the nicest people could have odd habits that annoy you. They could have jobs where they come and go at wierd hours. Maybe they won''t mow when you think they should. On and on and on.
 

mercoledi

Ideal_Rock
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Jun 20, 2006
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Hi- I just wanted to add my positive experience to the fray.

I currently rent and apartment that''s built into a single family home. When my landlady bought and renovated the condemned structure over 30 years ago, she and her husband carved out the apartment to help out with the rent. 30 years later, she still hasn''t had to kick anyone out! It''s a unique situation in that we do know her more intimately than one would a landlord in a non-attached apartment, but it has its perks. We''re tenant at will, so she is very careful about who she picks to live there, and there are some quirks- she sorts our mail so it doesn''t always come every day, she has a dog that we sometimes watch, there are certain (rare) noises that we can hear (and don''t mind); but overall it''s the best renting situation we''ve had. Our landlady has the security of having other people in the house with her, and we get things like free laundry and parking that are at a premium in this area. It isn''t for everyone, but it can work.
 

KimberlyH

Ideal_Rock
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Jun 15, 2006
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7,485
If I painted DH''s experience in a negative light it was not at all my intention. He has amazing tenants He gets invited to their weddings when they move on, we socialize with some of them, he even dated one of them in the distant past (she still lives in one of his properties). They treat the properties with lots of respect and care. I just wanted to make it clear that running a rental is not always easy and will take some effort on the OPs part, especially in the beginning when seeking out tenants.
 

Dandi

Ideal_Rock
Premium
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Jan 9, 2006
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5,442
My experience is a bit different in the sense that I''m not an onsite landlord, but I do own a rental property I purchased when I was 22. My FI owns one too, we had each of them before we built the house we''re living in. We each have fantastic *whew!* tenants and each house we rent out is in an area considered to be ''high end'' for lack of a better term, or in other words an area where rental and housing costs are high. Therefore we only really had ''professional'' people looking through our rentals as potential tenants, or those with a stable wage, so that''s something for you to think about too I guess.

We both insisted on thorough references from the tenants, via the real estate agent we use (she deals with EVERYTHING landlord related, all issues from the tenants go to her and she liases with us... $40 a month well spent!)

There are the odd maintenance issues with both places, but all in all it was a great decision for us to make, the tax advantage is fabbaluss! We can both claim depreciation on things like ovens, light fittings, carpet etc. every year at tax time. Taxdodge, yippee!!
 

AdaBeta27

Brilliant_Rock
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Sep 7, 2004
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906
My oldtimer friends who have duplexes, small apartment buildings, and single-family homes say they go out of their way to avoid renting to a single womam or several single female room mates. This will offend somebody, I'm sure. But these landlords (male) say women are slow-pays for rent, never have the money to pay for damages, their boyfriends tear up the place(s) and there's no way to trace whodunnit, and if they try to evict a woman, she claims sexual harrassment or worse, and the landlord is considered guilty until proven inocent.

I'm not saying I agree with any of this. I'm just offering is as a point to consider. These guys call single females the Tenants from Hades.
 

goldenstar

Brilliant_Rock
Joined
Sep 16, 2006
Messages
1,045
I think you shouldn''t have too much of a problem if you only want to rent out one side of a duplex. Its more of a headache when you have mulitple properties to worry about.

My BF has been a landlord for about 4 years. He rents out one single family home and one condo. The house was 3 years old when he bought it so it hasn''t had a ton of issues. The condo was brand new when he bought it so again, its in great shape. If you have an older property you will probably get more calls for repairs and such.

He''s had a couple of annoying tenants, but nothing too extreme. One family kinda left the house a mess when they moved out. He had to replace the carpet downstairs and repaint the whole interior. It was about time for this anyway so it was not a huge deal, but the family really wore out the place so he had to do it sooner than he planned.

He uses a property manager to find the tenants, but after someone is in the property he takes over. The property manager is great because they do credit checks and take the prospective tenants to the property to show them around. They also take care of the paperwork which is great because you don''t have to worry about drafting contracts. Yes, they do charge a fee but its worth it for him. Property managers are experienced in finding reliable and responsible tenants.

One of the biggest pros about being a landlord is the tax effect. A lot of the expenses are tax deductible. Its also great that he has someone paying the mortgage and he gets all the benefits, and is gaining equity.

The con of being a landlord is that you have to have money set aside in case something needs to be repaired or if the tenant pays rent late. If a landlord is living paycheck to paycheck it would not work AT ALL. You never know when the water heater is going to bust or the garage door is going to break. Also, the landlord needs to pay his mortgage on time and sometimes you cannot wait until the tenant pays the rent.
 

Independent Gal

Ideal_Rock
Joined
Nov 12, 2006
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5,471
I''m completely housepoor (i.e., more than half my income goes to my mortgage) but I love to travel, so I rent out my place when I go abroad... it pays for my trip, or part of it, and someone else gets a nice downtown condo in a city where hotels can be exhorbitant.

Until this last trip, I never had a problem and the arrangement worked great. I lock up my jewelery and papers in my office, take a security deposit, I ask lots of questions before I agree to rent, and I''m extra nice and leave the tenants chocolates and scented soap and stuff when I leave (primarily because I like being hospitable, but I also hope it makes them want to be nice and take care of my place too).

But while I was away last month, my tenant totally wrecked my toilet, causing a small flood which destroyed downstairs neighbour''s ceiling. Almost $1000 and many high pitched phone calls from the neighbour and the renter later, I''m thinking I won''t be renting the place out anymore.

On the upside, I love doing home maintenance and actually enjoyed fixing the toilet when I got back. Weird? Yeah, sure. But whatever.
 

FireGoddess

Super_Ideal_Rock
Joined
Jan 25, 2005
Messages
12,145
My BIL and SIL did this. They bought a duplex last year, live in the back unit, and have tenants in the front half. They like it because they''re on site, and it has been going well. They meet with prospective tenants, do a credit check, and have been rather pleased. I know some tenants can be horror stories but possibly less likely so when they know the landlord is living right behind them!
 

Tacori E-ring

Super_Ideal_Rock
Joined
Aug 15, 2005
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20,038
We got a call at 1 AM yesterday and I thought of this thread. One of DH''s tenants started a grease fire. I guess it was bad enough for the fire department to come. She just told him she needed a new stove. Never once said she was sorry!
 

Tacori E-ring

Super_Ideal_Rock
Joined
Aug 15, 2005
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20,038
Date: 3/31/2007 11:16:19 PM
Author: bujiatang
GAH!
Yeah, but what you are thinking about (living onsite) is completely different than what my DH does. Plus I am assuming you will be renting to higher end renters. He has a lot of low income houses. One lady actually DID burn the house done. She was so upset but no one was hurt (I think she has 10 kids). We have lots of horror stories and my DH is actually getting more into "flipping" and less into buy and hold just b/c he is burnt out. His tenants call him NON-STOP. He''s had to evict people as well. I am not sure what state you live in but you might want to check out the rental laws. I would NEVER own rental properties in places like San Francisco for example b/c ALL the laws favor the renters not the owners. Creates messy situations!
 

bujiatang

Rough_Rock
Joined
Feb 22, 2007
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91
Date: 4/1/2007 1:17:36 AM
Author: Tacori E-ring
One lady actually DID burn the house down.
o_O

did she ask for her security deposit when they moved out?

The impression I''m getting is that we need to be better established, or in other words after we have owned property first and have a handle on maintaining it. We are going to need to have enough money in the bank to cover the worst possible situation also.
 

Tacori E-ring

Super_Ideal_Rock
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20,038
You do have to make sure you have money b/c stuff happens. Applicances break, HVACs break, basically everything breaks, carpet needs replacing, plumbing gets backed-up, it is never ending. His tenants NEVER get their deposits back
But like I said these people don''t care. Many of them are section 8 so the government pays their rent (or should I say we all do!)
 
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