All Forum Posts by: Foley Ma

Hi Tracey, congrats! I'm more of a novice than you...how did you end up reviewing and selecting 6 houses in so many different markets. Did you go personally and work w/local realtors on all of them, or is there a service for that, i.e. you mentioned roofstock. I assume you'll get a property manager to manage them? How did you find/vet them and what kind of fees are you paying? Thanks!

Thanks. I've heard everyone loud and clear. No major modifications. 

Though on one hand it's nice to rent to people the neighbors would be happy with, I'll need to consider the fact if I rented to complete strangers I would treat it purely as a business. It's kind of like that old adage, don't mix friends with business. 

LOL that's a funny story @Greg B.  I've heard of similar stories too. I'll be doing the background and credit check, reference checks, previous landlord, etc...but since my neighbors know them I'll have to assume whoever signs the lease is actually them! PIus Googled the husband and found his professional portfolio online.

One thing that has struck me as odd too, is, I know they have a dog. But they haven't bothered to ask if I accept dogs. I know they have a dog as the neighbor realtor asked if my backyard is fenced, and said that they have a dog that another neighbor here dog sits for them when they are out of town. Since the wife is I believe stay at home, I'd assume the dog is better mannered than others.

How upfront are your tenants usually with dogs? I've read on here that sometimes they'll try to hide it. It will definitely be asked on the application, and I'll push for a non-refundable cleaning fee...but I originally didn't want to accept dogs as we have nice hardwood floors and they could scratch them up. But I also know in a SFH with a fenced backyard, many potential tenants would be dog owners.

Thanks for your replies! I guess I can concede a discount since they are a referral, neighbors know them, etc...but not a massive $500 discount...max meet half way.  Any work they do is on their part. Put a clause in the lease that any modification they do need to be reverted to original state, unless I approve. 

Hello BP,

I'm a 1st time landlord. I am in the process of renting out my current SFH. I will be moving to my new house in a few days about 45 minutes away. I have in a fairly tight knit neighborhood, and one of the previous homeowners want to move back to the neighborhood, but only for a few years as they are retiring. They thought they would retire earlier, so sold their house 4 years ago. Prior to that they lived there for 20+ years.

I never knew of them, as they sold their house before I moved in. 

Based on my research and talking to my realtor, I can get $2200/month for my house. It's a 4Bedroom, 3 bath. The two closest comp, one rents for $2300 and another $2100. Both are 200 square feet smaller and have 1 less bathroom, or 1 less bed and bath. Both are also 10-20 years newer (though, my house is in good condition).

The potential tenants contacted the realtor on my street asking for home rentals, and he knew I wanted to rent so got them in touch with me. I have yet to list my house anywhere.

The tenant renovated their kitchen, create a mud room and other things on the 1st floor. 

What they are proposing is $1700 to move in, they will maintain and upgrade the yard, change out electric stove for gas stove, replace a faucets, toilets, and some other upgrades to expand out the master bathroom. They want to see themselves as care takers, and not renters. They say they'll save me trouble as they take care of their house, they won't call me for random repairs.

I haven't ran a background/credit check or ask them to formally apply, still coming to terms. If it was someone off the streets telling me this I'd tell them heck no. But they've lived here for 20+ years, they are still on good terms with some of the neighbors. 

Lets say the market rent for my house is even $2100, or $2000. At that price point I think I would screen out a lot of people who would cause trouble that they'd would save me trouble from. 

So, good idea or bad idea? Any other questions I should ask for, or red flags? Even from the beginning they were keen on negotiating their price based on telling me how much trouble they'll save me from. I'm sure I can counter their price with something higher. Have you ever had someone negotiate this way? And what's it worth to have someone the neighbors know? 

Thanks!

@Account ClosedThank you very very much for your time and response! I thought a few people would answer a few here and there but thank you for answering all, and thoroughly. You make a lot of great points. 

After dwelling on my questions, I realized one of my cousins has rental property, I have 2 friends that are property managers, 1 current coworker who manages a few properties himself, and a former coworker who had a dozen section 8 housing. So I'll pick their brains as well.

I spoke to my cousin, who lives in LA and has a few properties in Vegas. He goes through a property management company. Living so far from his properties, property management is the way to go. But then I asked him about pests, and A.C. filter and he has no idea what goes on in the house. Go figure...For the lawn he also has on the lease that the tenant takes care of it, or the property management companies does it. 

I guess for pests, that's not view as 'protecting your investment'? Since you also live in Georgia...the bugs seem to scurry inside for the winter. I guess they are more of a nuisance and won't damage the house. I also get termite inspections and have a termite bond, I guess I should carry that forward. 

$2500 for all the windows - that's awesome. My house is 2 stories so I'd have to think twice about doing that myself. I scraped off a bunch of paint, so out of 22 windows only 4 don't open (and I wouldn't open those 4 particular ones anyways, based on where they are). 

To everyone who has replied, thanks again. 

@Jason Hern I appreciate your response, and agree that those are 'bigger problems'. I agree it's best to be prepared for everything, even the trivial questions I've asked. The reason why I don't ask the hard questions is because many of those you pose have been discussed in detail in these forums, books and blogs. 

I haven't seen too many posts about trivial stuff (and I apologize if they have been discussed, but there is a lot of info on this forum to sift through) Even though I've directly asked trivial questions, received many responses, not many of the responses answer my questions directly (and respectfully, even your answer). My realtor herself has rental property, so she can probably answer my questions or point me somewhere, but I wanted to get involved in BP from the get go. 

About the dogs, funny enough a house down the street from me is a rental...the tenant was breeding pitbulls illegally. One of them ran out bit someone and their dog. I've been following the responses on Next Door so have an idea of what would be involved.

@Nick Doria - @Katie Barlow My realtor will start the process with me in look at the house again (she hasn't seen it in 3 years) and calculating the cash flow. I've judged the rental rate based on a 2 houses within 1 mile of me. There is one for rent that is newer than mine with 1 less bath for $2150, and another that is older and with 1 less bedroom and 1 less bathroom than mine for $1650. So it gives me a rough ball park of slightly less than $2k. A similar house on my street just got under contract. Asking price was $330k. I don't know the selling price yet, but it went under contract in than 2 weeks. I got my house for $215k.

@Anthony Dooley Thanks for your reply - how would you judge 'something worth suing for'. I have ~$100k in equity in the house, 2 older cars (mine and my wife's), 7 years of  401k, roth ira. 

@Katie Barlow

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! 

Thanks @Mark Nolan and @Mike Watkins. Thanks for the welcome and advice. rentometer looks cool. Yep my first step is to make sure the numbers work. I closed on a house a few weeks back and will be moving within a few weeks. The realtor that I used to purchased my current house and new house said she will help me crunch the numbers and list it. I purchased my current house 3+ years ago at the bottom of the market and the house has appreciated ~50% since then. Her inclination is the numbers will work and I hope so too - but I'd like to figure it out myself. Worst case I sell it.

Near Frazier Rd & Lawrenceville Highway