Originally posted by killrtiller:
Good evening!
I have just accepted a job several states away and would like to convert my primary residence into an investment property. I have been reading all across these forums and google, but I wanted to post my "to do" & "unanswered question" list for our resident experts to analyze and let me know what critical step I'm missing.
1) Get landlord insurance instead of home insurance
2) Interview and find a good PM (Lynchburg, VA - anybody have a lead?)
3) Do I have to contact my bank? I'm assuming not as long as I personally am still paying the note.
4) Accumulated approximately $3k in "safety net" funds earmarked specifically for the house for vacancies/repairs. Will be added to on a monthly basis up to about $6k at which point I'll put more towards the mortgage. I don't need cash flow, I just want a paid off property in 15 years.
5) At this point I am not interested in setting up an LLC. I don't have major equity or assets at this point - good luck wringing a drop out of me now! I would set one up within 2-3 years though once I find a good attorney.
6) Would the PM handle lawn maintenance in their 10% cut? Or is that extra?
7) Do PM's send you monthly statements? How do you settle up on extra maintenance costs?
I appreciate the advice guys, thank you!
Congrats on the job! I only have a little input on a couple of your line items:
#3 Read your note. You can probably get away with not informing them, but some crazy notes have been written in the last 10 years.
#5 I would not set up an llc on this. The bank would likely require you to re-finance instead of letting your llc assume the mortgage. There is a very good chance this would be at a higher interest rate since this is an investment property.
Also, remember your property tax bill will likely go up as this is not your primary residence anymore. It would probably be easier to volunteer that info to the municipality, than taking the chance that they figure it out later and charge you interest and fees.
