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Updated almost 9 years ago,
Starter questions: Renting out my current primary house
Hi all,
First...wow there's a lot of information in this forum. There's so much info on there and the community is great. I'm trying to make it a habit to browse random forums everyday, rather than my random news sites so I can learn more.
So I have some newbie questions and hope to get some direction. I've read a bunch of forums, the book Landlording, the "How to Rent Your House" guide. I'd like to get some gaps filled.
My scenario: I've recently closed on a house ~40 minutes away so I can be closer to work. I currently live in Decatur, GA (30033 zip code) and by shear luck, bought my house as a short sale in 2012...so very near the bottom of the market. According to zillow my house has appreciated ~50% since and from what I see of other sold houses that's about right.
My current mortgage is ~1275 including tax and insurance. I believe without homestead exemption it will add ~$60 to it. My house is a 4bedroom 3 baths - even though a lot of houses around me are that size, I do not see a lot of houses around me on the rental market of that size. Mostly 3 bedrooms (probably better bang for the buck from an investment stand point). Just extrapolating, rent I estimate I'd get ~$2k, zillow says $1975.
My realtor, which I used to buy my current house and new house said she can help me rent it out. She's actually coming tomorrow to take a look at the house and suggest improvements.
Why I rent to rent it out: I believe my area is growing (lots of new houses, new shopping centers) so there will be continued appreciation. Getting some basic cash flow. Getting experience in renting. I really like this neighborhood and my neighbors...maybe in the future I'll move back, or my parents take over the house if/when they move to Georgia.
My questions:
1) I've had the intention to rent out the house, and she even says I should. What's her benefit? She has access to MLS to post my house and says it's all free of charge for me. When I sell it she banks on me going through her, and maybe my tenants need a realtor when they buy and hope they use her?
2) LLC. Naturally the house is currently under my name. I assume I need to get it into an LLC? How does that work?
3) Liability: My property is the standard .25 acres, but behind my house is another property of about 1-1.5 acre, but all I see are woods. Mosquito in Georgia is a given, especially with the woods. How responsible am I for mosquitos? I ask...because of all this Zika scare. There's a old swing set left by the previous owner - it's never been used as I dont' have kids, do I need to remove it for fear of liability?
4) The house is built in 1974 - I fear I would get a tenant that expects it to operate like a house build in 2014. For example, the windows are the original single pane - some are hard to open, in winter the some of the storm windows get condensation, but I don't think I'd want to replace ~20 windows. All the bathroom vent fans look like they are original, thus old and not whisper quiet like the newer fans. Would that be a valid complaint, or just a fact of living in an older home?
5) Management. Since my realtor is going to help me get tenants, the house is perfectly livable, I don't plan on using a property management company. Having said that, even though I can make minor repairs, if a pipes burst in the middle of the night besides turning off the main water valve I wouldn't know what else to do. How do I ensure I respond to issues by the tenants in a quick manner? i.e. furance breaks in the middle of winter. Home Warranty company? Have a list of on call contractors?
6) Speaking of pipe bursting...it's a common advice around here to drip your faucets when below freezing, otherwise your pipes burst. A neighbor down the street, who are renters, actually had the pipes burst. How do I ensure that is done? Put it in the contract? Remind the tenant in winter? If they burst would that be a repair the tenant pays?
7) HVAC. My system uses one of those big filters that are only replaced every 3-6 months (not your standard 1" filters), and they cost like $30 a pop. Would you recommend I replace them myself, or buy filters to give it to tenant and they replace it, or tell the tenant they need to buy the filters and do it themselves? Or hire a HVAC maintenance company to come up and inspect every 6 months and replace them, and have the tenant replace it more frequently if they desire. They would need to go outside, and into a crawlspace on a slab.
8) Speaking of crawlspace...there's a few feet below ground. There's a sump pump and on the parts that is dirty/gravel. A mitigation company had installed the pump, tarp previously. There's half that's on a slab. On that half...whenever it rains in Georgia for like 2 weeks straight, some water will seep through the walls on the parts that's ~2 feet below ground. I have some neighbors that have it way worse...I don't see it as a problem since, the water is equivalent to like half a gallon of water poured all around and evaporates after it stops raining. Me personally, at one point I had cardboard boxes stored near the wall, which got damaged when it soaked up the water. Would this be an issue? Should I tell the tenant not to store stuff there. I have a metal storage rack there now to keep stuff off the ground - I could leave it with them?
9) Lawn. As I mentioned, my area is quite wooded. There's no hope of growing grass in the back, actually none of my neighbors have a typical lawn backyard. Front yard, some neighbors are able to grow some, some aren't...really depends on which house has sun and which don't. I've never been able to grow any grass, and my neighbors who have been here for a while said all the previous owners were never able to as well, one went as far to invest in a sprinkler system...my front lawn is more like 1/4th of nothing (dirt...directly below where there are trees), 1/4th grass, 1/2 others. I don't expect my tenant to make a miracle of the front lawn, but do expect the grass/others/weeds to be mowed. Should I leave a lawn mower with the tenant? Pay for a service? Or leave it up to them... What about other things like shrubbery, and raking of leaves (which is a PITA).
I know I wrote a lot, but wanted to give background to my questions. Thanks for your time!