Do I want to become a landlord?
We paid for this little house outright. We’ve been remodeling.
We have the opportunity to buy another house outright. We’re kicking around the idea of renting this one out.
Should we do that?
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33 Answers
I personally would not, but you have your husband to help in all things that need fixing. My brother had a rental house that the first person that rented it was a piece of garbage. She lied and said she had one small child. She had 3 teenagers that trashed the place. They put their cigarettes out on the carpet, put big holes in the walls and only paid the first month rent. It took my brother 3 months to get her out. Then the cost of fixing everything she and her family destroyed. He then rented it to a very reliable person that paid on time and hardly ever needed anything fixed as he could do it himself.
I’m renting out my childhood home. But I have a good property manager who just deals with everything. You have to gauge how much income you can get vs. selling the house and investing that in something else.
Good opportunity for extra income, and who can’t use that these days? Then again, as @chyna pointed out, it comes with risk. Never know for sure the habits of people you are renting to. Proceed with caution if you all decide to do that.
Go to your library and find everything you can about the subject, especially your legal obligations and rights as a landlord. If you don’t hand it to a property manager, prepare for it to be pretty much a full time job for one of you for at least the first year.
My cousin did this, and had his hands very full with it. He discovered that the income from it wasn’t worth his time, but if you think it is worth yours, be armed with all the knowledge.
I also have my son. He’d be my property manager.
Can I run a credit check on possible renters?
Absolutely. As long as you have the time and money to invest in needed repairs that come up from time to time.
I am currently renting out two different homes whether full time or AIRBNB.
Easy money$$$$$
Talk to a professional property management group, as if you were thinking of using their services, and ask them what measures they take to vet prospective tenants. Credit check? Employment reference? Stuff like that.
Well the rent would provide me with the money to make repairs @Forever_Free.
You can rent out the house and get some good money off of it so I would say you would want to become a landlord and you can get money to make repairs, bills and some prophet.
All my friends and family have had rentals and says it was very stressful.
My husbands family bought a few lots so they could keep the riffraff away and never rented them.
@KRD…I just want to become a landlord, not a whole prophet! ;)
You could always try it out and if it wasn’t working for you, step away from landlordism.
I wish I could find a single mom like I was, so I could provide affordable housing for them. I don’t think there are many single moms that had the mindset I had, though.
@Dutchess_lll That is exactly what my brother thought. He wanted to help a single mother and even charged less rent.
@Dutchess_III They basically just cleaned them up and tore the old houses down. So nothing.
I have the feeling a lot each may be our inheritance.
You’ve gone through so many transitions and upheavals in the last few years, I would think taking on another risky proposition would be the last thing you’d need right now.
Well I’d have a lot of support from My Guys. They’d be the ones doing all the heavy work.
I’d be doing the brain work.
Many possible options here. You have not stated all the possibilities you are entertaining.
Rent it out or what? Sell it? Live in it? Rent the other house you are considering?
Renting is fairly stress free when you have a good tenant. I have had many good tenants both as a landlord and taking care of other people’s property who really cared for the property and always paid on time. A couple tenants who were a little messy, but never destroyed the property in any way, and one that stopped paying, but I told my friend the landlord that the woman was lying when she was just in the application stage, and my friend did not listen to me.
If you sell it before a year you pay regular income tax on the profit. If you sell it after owning it a year, you only pay capital gains tax, which will be zero if your total income (all income) is less than $75K (it might be higher for 2022). If you wait two years of it being your primary residence then any profit you make is completely tax free.
You are fixing it up, maybe you want to live in it and not risk someone else messing it up, and buy the other property to rent out if it is livable as it is? Then you can sell this fixed up one when all of your profit will be tax free.
Your state might have laws that favor the tenant, that is something to consider. Each state is different.
@Dutchess_III: You’ve had your house for at least a month now, probably more, and your husband has ripped out a lot of stuff but only put up one piece of sheet rock so far. I am not insulting him but it doesn’t seem like he’s that energetic.
Someone above suggested that you could try being a landlord and if it doesn’t work, you can stop. The problem is you will have a tenant who will have a lease, so you won’t be able to just stop, you’ll have to let them stay for at the minimum the duration of the lease. It can’t just be like “oh, I don’t like this, you have to go now, bye!”
I have good friends who rent out multiple houses and when the tenants are good, it’s all good but when the tenants are bad, it’s very stressful and costly. Even our very own Augie had a bad tenant, I remember. She posted the pix on FB and I remember cat feces and lots of garbage left behind that they had to clean up, plus doors off the hinges and broken windows and total mess.
@snowberry Oh, your link says income up to $83,350 for 2022 is zero capital gains. It increased. Good link.
@Dutchess_III Are you already saying you’re using the house as your primary residence?
I’m pretty sure the federal government allows an RV to be a primary residence and if you sell for a profit after two years that money is tax free. Another question for your accountant if you think that situation might come up. You only need to have lived there 2 out of 5 consecutive years on a primary dwelling to escape the tax.
@jca2…my husband will be 70 this year. He’s gotten a LOT done. But there is some stuff he’s stuck on because it really needs two people.
The focus right now is getting the tankless water heater installed and plumbed (which he can do.) The heater was delivered yesterday. He spent bucks on some copper plumbing today
Next is installing the shower and tub (which he can do.) He has the mold resistant sheetrock on the front porch ready to be installed in the bathroom as soon as the other is done.
He’s doing as much as he can by himself.
The one piece of sheetrock was a Facebook joke. So are all my “Decor” posts.
When we’re ready to sheetrock the rest of the house it will be delivered enmasse.
Have I mentioned that he installed a brand new toilet and plumbed the icemaker to our fridge?
I didn’t mean the “not so energetic” comment as an insult, @Dutchess_III, but if your husband is 70 years old, that’s a limitation as far as what he is physically able to do if you have renters and stuff has to get done. I mean, you can have renters but you may need to hire people to help out (plumber, electrician, handyman, etc.).
No. He can do all that @jca2.
He is still very powerful and strong. And he has has a plumbing background. He can do damn near anything.
Then there is my son who can do all that too. AND I can boss my son around. But not Rick.
I’m covered from that angle.
We’re focused on the bathroom right now. God I need my showers and hot water! I expect my son will be over to lend a hand this weekend.
There has been a lull with the holidays and all is all.
BUT I screwed three screws in the wall to hold my dog leashes and keys today!!! All by my self
LOL! That’s the most energy I’ve expended in months. I hada take a nap afterward!
After the bathroom we need to put sheet rock up on the ceiling in the living room to help support the sheetrock on the walls. Now I need another nap just thinking about it.
I think you thrive on chaos so why not?
My real answer is no.
:)
I don’t thrive on chaos! Chaos is the last thing I want in my life
My sister in law runs rentals as a side job. She has found that renting for the higher end results in more reliable renters. That leads to fewer headaches.
A long time ago I had a rental in LA. The manager could only find low end renters. What a hassle! I lost rent and all of them left the place a mess every time.
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