Seeking Advice on Leasing Our Home and Moving to a Mobile Home

Houston, TX · Member since 2015 · 261 posts · 170 votes

2y

This sounds like a thought out plan.

Don't know how much losing the homestead is going to increase your payment but you will need to change your insurance to a dwelling policy (landlord) not a homeowner policy. This will be more expensive.

The best way to learn is by doing in my opinion

Hire a realtor. if you don't know one of the bat, I would get on har.com and see what is leasing in your area an maybe reach out to one of those agents that is already working that area. Make sure you get an experience realtor that can guide you through the leasing process, vette out any prospects, explain what your duties as a landlord are and what to expect, good bad and ugly.

1 Reply

Lane Berry

Property Manager · Houston, TX · Member since 2024 · 25 posts · 11 votes

2y

@Jacob Swihart

Your insurance will go up as Gustavo mentioned since it would be a rental income property. Also, you will lose that homestead and have to pay taxes on the rental income. Given the current rental market in Houston, you shouldn't expect much monthly income. The main benefit is continuing building that equity. Then, if you add more assets there could be some tax benefits.

As for as finding tenants, if you don't use a management company or leasing service/agent. I'd recommend just listing the property on Zillow and other similar sites. The key is to price it at the market rate. If overpriced, you with attract unqualified tenants. Placing the right tenant is crucial, don't just rush into a lease with one because you want the property filled. Ultimately, late rent/no rent payments or damage to the property can be extremely costly.

1 Reply

Michael Myers

Investor · Pleasant Hill, CA · Member since 2019 · 58 posts · 21 votes

2y

You should be able to figure out your future non-homestead taxes by looking at your current tax bill. There should be a line on there that shows what the homestead exemption is. You would then do the math to remove that exemption and see what the resulting yearly tax amount would be.

Since it's your first time being a landlord, it might make sense to utilize a property management company or agent to find and screen a good tenant. As @Lane Berry said, it can be very costly to get a bad one. If you want to do the month-to-month landlord duties to save on recurring management fees, there are companies / agents out there who will list the property, screen the tenants, and place a solid tenant, usually for about 1 month's rent.

I've got both a property manager and agent recommendation and would be happy to discuss, just shoot me a DM.

1 Reply

Cameron TopePro Member

Property Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes

2y

Quote from @Jacob Swihart:

Hello BiggerPockets community,

My wife and I purchased a house in Katy, TX a few years ago for $230k, right before the market surged. We secured a 3.2% interest rate and currently owe about $200k. The house is now worth approximately $315k.

Initially, we thought we'd stay here long-term, but we ended up with a larger house than we need. We've decided we want to move further out and get a few acres. Additionally, my commute is 25 miles each way.

Here's our plan:

1. **Lease our current house**: We believe leasing our house could be a good idea.

2. **Buy a mobile home**: We plan to buy a mobile home and place it on a leased lot 13 minutes from my office.

3. **Save money**: With reduced expenses (gas, power, tolls, etc.), we estimate that we will be about to increase our savings from about $600 per month to about $2,000 per month.

4. **Future plans**: After a few years, we aim to put a down payment on a piece of land and move the mobile home there.

Our goals are to build equity in our current house while working towards owning a nice piece of land and maybe eventually building a nice house on it.

**Questions:**

- I have no idea if my calculations on what the my costs for leasing the house are anywhere near accurate. My current payment with taxes and insurance is $1613/month(this is with pmi of $85/month. I just submitted a request to remove it). I'm seeing similarly sized homes leasing in my area for $2300/month. How big of an impact is losing the homestead exemption?

- How should I start with this? What do I need to learn? Are there any books I need to read?

- How do I find a tenant and manage a lease?

I'm not sure if this plan sounds crazy but my wife is on board and I think it's probably a good path to getting us where we want to be. I'm also not afraid of a little hard work but I'm feeling a bit overwhelmed and would appreciate any advice or guidance on where to start and what to focus on.

Thank you!

Hey Jacob,

It sounds like a great plan!

Couple things I wish someone told me when I rented out my primary in Katy:

- your taxes will go up dramatically over time

- cash flow is inconsistent

- while Katy is a fantastic rental market it's still competitive

To answer your questions:

- yes, the homestead exemption will increase your taxes at a faster rate but you can protest them either yourself (I don't recommend as I've tried and it was a pain) or with a professional service

- To start, you're either going to pay for books, classes, etc. or pay the school of hard knocks. Just search on BiggerPockets - there's a ton of great resources

- I would HIGHLY recommend using a leasing agent to find you a tenant. That was one of the most difficult and time consuming things when I was managing my own properties. And finding a good tenant makes the management MUCH easier.

Glad that your wife is on board - that's over half the battle!

Best of luck!

[email protected]832-770-7090

1 Reply

Jacob Swihart

OP

Member since 2024 · 2 posts · 0 votes

2y

Quote from @Cameron Tope:

Quote from @Jacob Swihart:

Hello BiggerPockets community,

My wife and I purchased a house in Katy, TX a few years ago for $230k, right before the market surged. We secured a 3.2% interest rate and currently owe about $200k. The house is now worth approximately $315k.

Initially, we thought we'd stay here long-term, but we ended up with a larger house than we need. We've decided we want to move further out and get a few acres. Additionally, my commute is 25 miles each way.

Here's our plan:

1. **Lease our current house**: We believe leasing our house could be a good idea.

2. **Buy a mobile home**: We plan to buy a mobile home and place it on a leased lot 13 minutes from my office.

3. **Save money**: With reduced expenses (gas, power, tolls, etc.), we estimate that we will be about to increase our savings from about $600 per month to about $2,000 per month.

4. **Future plans**: After a few years, we aim to put a down payment on a piece of land and move the mobile home there.

Our goals are to build equity in our current house while working towards owning a nice piece of land and maybe eventually building a nice house on it.

**Questions:**

- I have no idea if my calculations on what the my costs for leasing the house are anywhere near accurate. My current payment with taxes and insurance is $1613/month(this is with pmi of $85/month. I just submitted a request to remove it). I'm seeing similarly sized homes leasing in my area for $2300/month. How big of an impact is losing the homestead exemption?

- How should I start with this? What do I need to learn? Are there any books I need to read?

- How do I find a tenant and manage a lease?

I'm not sure if this plan sounds crazy but my wife is on board and I think it's probably a good path to getting us where we want to be. I'm also not afraid of a little hard work but I'm feeling a bit overwhelmed and would appreciate any advice or guidance on where to start and what to focus on.

Thank you!

Hey Jacob,

It sounds like a great plan!

Couple things I wish someone told me when I rented out my primary in Katy:

- your taxes will go up dramatically over time

- cash flow is inconsistent

- while Katy is a fantastic rental market it's still competitive

To answer your questions:

- yes, the homestead exemption will increase your taxes at a faster rate but you can protest them either yourself (I don't recommend as I've tried and it was a pain) or with a professional service

- To start, you're either going to pay for books, classes, etc. or pay the school of hard knocks. Just search on BiggerPockets - there's a ton of great resources

- I would HIGHLY recommend using a leasing agent to find you a tenant. That was one of the most difficult and time consuming things when I was managing my own properties. And finding a good tenant makes the management MUCH easier.

Glad that your wife is on board - that's over half the battle!

Best of luck!

Thanks for the feedback. I think I've worked out an accurate number on what my taxes will be and I've gotten a quote for dp-3 insurance so I think I have a good understanding of those costs now. What is the cost of a leasing agent and do you have someone you can recommend in the area?

0 Reply

Michael Myers

Investor · Pleasant Hill, CA · Member since 2019 · 58 posts · 21 votes

2y

@Jacob Swihart usually a leasing agent fee will be 1 month's rent. I've got my agent that I can recommend who does leasing if you want his info.

I haven't actually used property management in Houston, but if I ever do I was thinking of testing out Emerson Property Management (@Cameron Tope commented above) as it seems like they have good reviews and good pricing.

2 Reply

Michael SmytheBusiness Member

Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes

2y

@Jacob Swihart if you hire an agent to find a tenant - do NOT let them screen them!

It's a conflict of interest!
The agent gets paid when they find a tenant, so they have an incentive to take the first applicant with a pulse.

Otherwise, hire a PMC.

Logical Property Management4.9454 Reviews

Website View Page

2 Reply

Lane Berry

Property Manager · Houston, TX · Member since 2024 · 25 posts · 11 votes

2y

@Jacob Swihart Michael is spot on, I can't tell you how many horror stories I've heard from landlords who had agents give them terrible tenants just to get that commission asap. We have a dedicated leasing team that leases all our properties with extensive background checks to find the right tenant not just the first. If you would like more info just let me know.

1 Reply

Daniel TanasaBusiness Member

Realtor · Houston, TX · Member since 2019 · 351 posts · 174 votes

2y

Quote from @Jacob Swihart:

Hello BiggerPockets community,

My wife and I purchased a house in Katy, TX a few years ago for $230k, right before the market surged. We secured a 3.2% interest rate and currently owe about $200k. The house is now worth approximately $315k.

Initially, we thought we'd stay here long-term, but we ended up with a larger house than we need. We've decided we want to move further out and get a few acres. Additionally, my commute is 25 miles each way.

Here's our plan:

1. **Lease our current house**: We believe leasing our house could be a good idea.

2. **Buy a mobile home**: We plan to buy a mobile home and place it on a leased lot 13 minutes from my office.

3. **Save money**: With reduced expenses (gas, power, tolls, etc.), we estimate that we will be about to increase our savings from about $600 per month to about $2,000 per month.

4. **Future plans**: After a few years, we aim to put a down payment on a piece of land and move the mobile home there.

Our goals are to build equity in our current house while working towards owning a nice piece of land and maybe eventually building a nice house on it.

**Questions:**

- I have no idea if my calculations on what the my costs for leasing the house are anywhere near accurate. My current payment with taxes and insurance is $1613/month(this is with pmi of $85/month. I just submitted a request to remove it). I'm seeing similarly sized homes leasing in my area for $2300/month. How big of an impact is losing the homestead exemption?

- How should I start with this? What do I need to learn? Are there any books I need to read?

- How do I find a tenant and manage a lease?

I'm not sure if this plan sounds crazy but my wife is on board and I think it's probably a good path to getting us where we want to be. I'm also not afraid of a little hard work but I'm feeling a bit overwhelmed and would appreciate any advice or guidance on where to start and what to focus on.

Thank you!

Hey Jacob,

This sounds like a well thought out plan. I applaud you for being willing to give up on some confort for getting into a stronger financial position and to be able to reach your long term goals.

Seems like you have figured out the cost of the insurance and taxes.

Good luck! DM me if you have any questions about being a landlord and I will try to help.

0 Reply

Morgan Tondre

NJ · Member since 2024 · 207 posts · 91 votes

2y

Quote from :

@Jacob Swihart usually a leasing agent fee will be 1 month's rent. I've got my agent that I can recommend who does leasing if you want his info.

I haven't actually used property management in Houston, but if I ever do I was thinking of testing out Emerson Property Management (@Cameron Tope commented above) as it seems like they have good reviews and good pricing.

Thank you for the recommendation, @Michael Myers!

At Emerson, we offer a pricing option with only paying 1/2 of the first month's rent for our Leasing Fee as well... @Cameron Tope started the company officially in 2018 after having bad experiences with Property Management in Houston over his 35+ property portfolio.. so he's built a lot of our processes to be Investor tailored compared to most Property Management!

1 Reply

Seeking Advice on Leasing Our Home and Moving to a Mobile Home

Seeking Advice on Leasing Our Home and Moving to a Mobile Home

Most Popular Reply

10 Replies