Advice on living in basement and renting main areas

[Lissa Harre]

I own a 5 bedroom 3&1/2 bath house with a finished basement. I’m hoping to live in the basement and rent out the top 2 floors. 

How should I split utilities, HOA, ect?

Can I limit the rental to not include the backyard? The backyard is fully fenced but the deck to get to it is not structurally sound and I can’t afford to fix it. Also I have young children that play in the yard so I don’t want strangers using their space. My husband thinks this will limits our prospective tenants too much and we should just fix the deck and be done with it. 

What should I look for in a tenant to live peaceably? I’m concerned about unreasonable personalities that will either be very demanding or overly messy/loud/ect. 

What issues have you had with tenants in your home? 

Should I allow pets? Can I limit what kinds? Should pet fees be monthly or 1x? 

Parking: The house has a 2 car garage and a driveway that could hold 6 cars and no on street parking. Can I limit parking to only in the garage? If I park my car at the bottom of the driveway on one side they will have access to both garage spaces and I will never be blocked. 

Pros and cons of property management company? Is it necessary?

[Lissa Harre]

Quote from @Nathan Gesner:

Quote from @Lissa Harre:

Reading a couple books may answer 80% of your questions. I recommend "Every Landlord's Legal Guide" by NOLO. Written by attorney investors, it's full of practical advice pertaining to management of investment property, has sample forms that can be edited, and - most importantly - they tell you what your primary state laws are and where you can read them. It's updated every year and is the best $40 you'll spend as a Landlord. There is one book for 49 states and a separate book for California. You can also check out "Managing Rental Properties" by Brandon Turner.

There is no problem restricting yard use, but it may cut down on the number of interested parties. That can be a good thing or a bad thing.

I definitely recommend allowing pets, but setting limits. No more than two, keep them small, and charge extra rent per month. $50 per month for a dog earns you $600 a year and you get to keep it, whereas deposits are usually smaller and have to be returned.

Be very, very clear about noise levels! Warn them in your marketing, warn them when you show the property, and warn them when you sign the lease. Be prepared to issue warning letters, fines, or terminate the lease when they violate the noise restrictions.

Same with parking. Be very clear about the number of vehicles allowed and where they are allowed to park. 

Thank you so much. I have been so overwhelmed with all of the different books/blogs/podcasts and most of the seem to be centered around how to buy a property not how to run it.