All Forum Posts by: Peter Turner

I have been reading about the 50% rule of thumb and I am right there breaking even.

I was checking the landlord insurance and through Nationwide is $580 a year, which is $220 less than my home owners insurance.

Also, my county taxes are reduced this last year by $240 too. So I have an extra $40 a month in savings combined for taxes and insurance.

When I posted this example I stated $400, but more accurate cash flow number is $480 plus the little extra saving on insurance and taxes I will be breaking almost even on the 50% rule. The house was built in 1990 and even though I have never upgraded the HVAC unit or water heater, they have been serviced and still going strong, no issues with this blizzard either.

I will take my chances. Thanks for the input ! I appreciate it.

Of course! I am just at the early stages of planning and trying this out for a couple of years. I might hate being a landlord, not sure yet.

From your suggestion then I am assuming you'd be happy with a rental giving you $400 cash flow?

Hello guys,

I am trying to figure out if Renting out my primary home of 10yrs is a good decision or not at a $400 positive cash flow.

The home has a mtg of $600 and rent for the tenant in mind will be $1000. No management company involved at this point.

Homes like mine are renting for around $1100 to $1200 so after a year when this prospect tenant moves out I will market the property for $1200 so the cash flow then, including a management company, will be $500. (I'm giving the tenant a good deal)

So, at a $400 cash flow for the next year and possibly $500 when i get a new tenant in the near future. Is Renting this property a good decision?

The other option is selling it now and making just 10k after paying realtors and closing costs for buyer etc..

If I sell in three years to avoid paying capital gains, I am calculating the mortgage principal will go down $2500 per year and the property values will go up by at least $5k. So selling in 3yrs will net me around $12,500 More just in appreciation and lowered mtg payoff for a total of $22,500. Plus money made from cash flow in renting out at least another $14,400 in three years calculated even at $400. (I know I will have costs and pay taxes, etc.. but looking at these calculations, doesn't sound too bad or not so hot either?)

What do you think of all this numbers if you were in my position?

I appreciate your insight on this and thank you for reading!

I won't worry anymore. Thanks for the input.

I have nationwide for cars and home.. wonder if they will do a landlord policy. Should they be around the same cost of a home owner's policy or cheaper? I'm checking with them tomorrow, but if you have a suggestion on an insurance company, I'd call them too.

Thanks again!

Jon,

It is a conventional loan that was modified back in 2012 due to financial hardship. I was reviewing modification documents and they are an amendment and supplement to the original note. In such amendment there is nothing that says anything about moving out or renting, so I am assuming I should be good.

But just in case, since I do feel that the less they know the better due to the modification, does the change of insurance alert the lender anyways?

And is there any way you know of to forward the monthly statement without giving the lender a new address?

I am sure many homeowners turned landlord with FHA loans have had to deal with this very same question/concern.

Thanks again

First time trying to rent my primary residence and was wondering if the lender will find out when I change the insurance type from home owner's to Rental type.

If they do find out, will that create any realistic issues? I've owned this home for 10+ yrs and have a mortgage with major bank.

Also, how do I prevent the bank's statements to keep coming to the home? They do not allow online only statements and I mail forwarding can only be done for a year I think. I am afraid of calling the bank to tell them I need to have the mailing address changed to a different one since it will be pretty obvious I do not live in the home any longer. Thoughts?

Thanks in advance.

thanks a lot for the suggestion. I have read some of your posts and I know you are successful at doing this.

In your experience what has happened when they do not qualify at the end of the term? Have they continued as tenants or you extended the period with a new contract?
Have they requested their down payment (the $3,915) back since they can't buy it? I wonder if they trash the home when this happens.. and how you handle it.

Also, so that I don't have to put a dime at closing. I am estimating my payoff 12 months from when they sign the contract to be around 112k.
So I should add to that payoff at least the $6,315 they will accumulate for the whole year as credit and add my title company's closing costs? Do you prorate taxes or they should pay them since they are living in the property?

I am thinking the purchase price then should be at least at $119k to break even.

I am sure I am leaving something out. Please let me know what you consider when calculating the purchase price if you want to at least net even.

Thanks again!!!! this has been really helpful.

Hello,

I am thinking about doing a rent to own on my personal home.
Would you please suggest a fee structure that would be appropriate for my situation? I mean, how much down payment, rent, monthly allocation to principal, 2 or 1 yr, etc.

My mortgage is around 114k
Monthly mtg pymt $560.00
Monthly possible rent could be between 1,000 to 1,2000 (next door house is being advertised for rent for $1,200 and it is almost the same floorplan)

I need to start moving this home quick as I have to leave in 2 months on a trip.
So I would appreciate your input so I can start advertising some numbers to potential tenants.

Thank you for your time.

Thanks for your replies.

I was thinking that to I might be able to to a Rent To own so that way I get a Tenant that will take care of the property (theoretically) and will also get a down payment.

What is the consensus for doing this type of deals as a seller/landlord?

I think I might give it a shot at finding a tenant myself if I can find a way for them to pay me without me being there to pick up the money. I have been reading about services and even considered paypal if they can and if they fund it with their checking.
will do some studying on the subject though.