Renting Our House... Perspectives, Please!

Sorry I have no advice for you but I may have a renter. My friend, who has a good job and is just wonderful is going through separation and mother of 11 year old will be looking for a house to rent in the Antelope area/Dry Creek School district. So if you live around here and decide to rent could you let me know.
Good luck and Thank you!

I rent out an in-law apartment behind my house, a duplex down the street, and have been renting out a furnished house (while an estate finishes settling) across town. I'm in Berkeley which contrary to popular opinion, makes it easy.
I've been a stay at-home mom during all this, and it's made me feel much more like a support of the family.
It isn't an unbearable amount of work, rather intense periods once in a while.
If you are going to be nearby I would say absolutely Do Not deal through an intermediary: you want to be the one making the decisions.
First: get the Nolo Press book on being a landlord. It will run you through much more of the basic law than you will ever need. And it will have blank forms for leases.
Second: look up on Craigslist for equivalent rentals to what you are offering. This will give you an idea of what the market will bear. While you want to cover all the expenses of the house, you need to ask for about what other people are asking if you want to rent it out.
Third: you need to think through, clearly, what you are looking for in a tenant. This isn't necessarily obvious.
For example, for your first tenant you may not want someone who wants to settle in forever, since your own move is an experiment and you might change your mind. And, you may want to think about why someone is looking to rent in your area. As I said, I am in Berkeley, and near the campus, so students and campus workers are likely. Worst tenant (hey, my husband did the interviewing) was a lawyer and family. Warning should have been: what is a mid-career lawyer doing not already owning his own place? (Answer, he was screaming loony). But - importantly - he was outside of my normal tenant profile. (An important point, though, the majority of tenants over the years have been nifty people I've been happy to deal with.) Bottom line? Be picky. Use your instinct. Have an application form of your own - modify whatever Nolo suggests with your own concerns. And stick to your own rules! If you have decided No Dogs, people should respect that: if they start off wanting to bend rules, it's only going to get worse over time. Oh and - important - STAY LEGAL. Show the house to everyone, and keep your mouth zipped. It is illegal to not rent to folks with children, to discriminate on about any basis you can think of, and so on. So show the place to anyone who asks, and don't discuss any reasons for why you make decisions. Which reminds me - umbrella insurance!
Fourth. Not having an agent means they phone you if the drain stops up. No biggie. It also means you come by with the plumber, because it gives you a non-creepy excuse for coming by the house. You do want to do this from time to time, just to make sure the walls are still there. (Just joking!) But do make sure you tell them to tell you as soon as anything breaks.
Fifth. Figure out the finances as best you can before you start: property tax, mortgage, and a repairs fund, all have to go somewhere to wait. Move utilities into tenant's name immediately. Decide whether they keep up the yard or you hire a service. Bear in mind that if you hire a service, it is a tax deduction. Which leads me to
Sixth. Talk to your tax person. Depreciation is your friend! It makes a huge whopping difference on your tax burden. Also, home repairs are also now tax deductions as a business expense, as long as you don't live there over a certain percentage of the year.
Seventh. Even the best tenant breaks things, and sometimes things just die. Don't leave anything you care about, in an irreplaceable sort of way, on the property.
Eighth. You are not alone. In Berkeley and in San Francisco there are Rent Boards, and I have gone to them multiple times for advice. They have always been very helpful, even when it's been something not quite part of their mission. There are also landlord associations, but they've always seemed a bit too politically regressive to me. (I'm just wanting advice on handling a security deposit return when one of three kids is leaving, but they are raving on and on about killing rent control. Not helpful.)

A lot of it depends on the people you find to rent. It can be totally fine or it can be the worst headache of your life.

It's true that many renters are very destructive---I've seen the damage! However some renters are good. We rent, through a property management company, and we have actually increased the value of the house we live in (installed sprinklers, new light fixtures, simple landscaping, etc.), because it increases our quality of life, and it became very clear that the owners/managers are only willing to do cheap temporary changes, which end up making things worse in the long run. (don't be like that)
I think professional property management is a good way to go, just to take the stress off of you... Good luck. = )

Our rental property is in S. Nevada & because of the current economic situation the rental market is now extremely competitive. We are upside down on that house, so the rent coming in only covers about 1/2 the mortgage. Now we have no renters & we are going into our 2nd month having to pay a full mortgage, not knowing when the next renter will be moving in.

My strongest advice is to make sure you have a good 4 to 6 months of cash set aside in the likely event that you will not have renters for 2 months out of every rental year.

Good luck!

I would like perspective on this issue as well as we are also considering doing the same thing. I wold love to sell our house but like you, we would take a loss on our home.

I did a 1031 exchange when I sold a home in Pacifica and bought rental property near where I live. This was my grand scheme for my retirement.....it has not been easy. I have had good renters, but also a share of people who trash my rentals. Craigs list I have found to be the best place to find potential renters. If you are not in the area of your rental, it is probably best to hire a property manager who probably will take from 6 to 10% of the rent each month. Be sure to check with several and investigate their background/references. I had a property manager who stole from me, did very little other than collect rent which he pocketed. However, there are some very reliable property managers out there.

The best source for landlords (and tenants) is the Nolo Press book "Landlording" There is a special edition for California properties and it has chapters on how to screen tenants, how to price your rental, includes forms to use (application to rent, lease and month to month rent forms, 3 day notice to pay rent or quit, pet agreements, etc.). There is a Nolo Press outlet store in Berkeley which often has discounts on their books which are prepared by attorneys or you can also order online. Good luck.

Our 1st home is currently under what we paid 8 years ago and we bought a 2nd home right before the market crashed 2 years ago. We could not sell so we decided to rent. We did not want to guess at the rental value and needed to understand the process more so instead of hiring someone to handle the entire landlord stuff, so we hired a company to advertise, process applications and screen people. We decided not to hire them on a monthly basis. If I remember correctly they charged a about 40% of the monthly rent for the fee (once it was rented). We decided to handle the landlord stuff after we got soemone in as it cost about $150 or so a month. I found the managment companies are very busy and seem to have difficutly keeping up so I ended up showing the house on many occassions. However it turned out to be a benefit as I was able to screen those potentially harmful prospects (young kids who only talked about partying) out. Also these companies seem to know the customers, as often times they have rented to them previously.

If you don't charge the peak price and you charge an in between market values, you have a better chance at renting the home quicker. The management company can tell you the market prices, based on the area and the house.

Everytime I need a new tenant, I also do my own advertising where I can and I continue to screen the prospects when I can.

I do provide a gardner, but don't pay water, garbage or any other utilities.

Good luck.

Hi M.,

About 15 yrs ago, my husband and I managed a few properties for my dad. It's a headache, but can definitely be done if you need to. I had a book on lanlord laws, but it's now 15 yrs old, so I'm sure it wouldn't do you much good.
The best way to determine what to rent it for is to check listings in the area for comparibles, and also ask your renting neighbors what they are paying - if you are comfortable with that. Remember to take into consideration the amount of bedrooms etc when comparing.

Also, if you are a SAHM, have you considered homeschooling? That's the best school around :) Most areas now have homeschooling programs through the public school district so that you can get all materials for free and also have support from experienced teachers - also, the school keeps the records and does the STAR testing. There are many extra-curricular activities that are available, and the best part is you work schooling around your schedule, and you're children can work at a pace that best fits them. Plus, you'll be the respected authority figure in their lives, rather than some teacher. :)

You also mentioned that you were looking to do some part-time or temporary work for a little extra income. Have you considered a residual income from home? I've been working for a company that allows people to earn an income from home working part time or full time. If you're interested in looking into it, email me or request info at www.HomeWithMy4.com The website does not provide much info on our company or the position, but you can get a little info on our team and mission. It's a simple way to earn a guaranteed $120 per month with very little effort, on up to a replacement income with consistant part-time effort.
Best of luck to you :)

R.

My husband and I are currently landlords in the apartment building we live in. A different situation from yours but I thought I'd share my experiences as a landlord with you. My husband's family owns the building. We have a property manager who manages the rental process. I have asked numerous of times to be involved in the rental/interview process since I live in the building but for some reason the property manager chooses to ignore me. We have been living here for almost 10 years. The first 2 years were really tough. We had tenants that smoked (even though it is a non-smoking building), did drugs, played loud music, damaged property. Because SF rental laws are very strict and we had no real proof they were doing drugs (except for the smell), we were unable to evict these tenants. We had to deal with them for 1 year and then choose not to renew their lease. It was a living nightmare! The next year, we had a tenant who constantly had family visiting which created a lot of noise and also damaged property. Finally in the 3rd year, we got a tenant who is still with us. Quiet, non-smoker, pays his rent on time. Even though he is usually a good tenant, he does break things from time to time so we have to deal with fixing stuff. No one is perfect. Make sure you interview and get references. This is your home. Make sure you find someone who absolutely loves your home and you have confidence will take care of it. Since you won't be living there, you won't have to deal with noise - if they are noisy. But your neighbors will. So keep that in mind too. I had no choice in becoming a landlord since my husband's family owns the building. Looking back now, if I knew all the headaches I had to go through, I would not be a landlord.

Hi M.,
My husband and I are doing this currently. It is important to find the right family to rent/lease your home and for your lease and application process to be very specific in terms of your expectations for upkeeping your home, etc. I have all of the forms and information that you would need - we have been doing this for several years now so our lessons learned have been sewn into the documents. Let me know if you'd like me to email you the information. It is a lot of work, but economically worth it (I hope!).
Good luck and let me know if I can help.

We have a management company that handles our rental. They discussed with us what we should rent it for and then let us decide. They advertised and did the apps, credit checks and rental contract. They keep an accounting of everything and do drive by inspections monthly. They collect the rent and then send us our portion after their fee of $85. They would handle all repairs but I have asked the renter to call me instead cause most often I can find someone cheaper than the people they use. My only reason for having a management company is that I dont want to handle an eviction if one is ever needed.

Hi M.. I currently rent out my house in CO, so things might be a little different here in CA. I have a property manager who I pay 10% of the rent to manage my property (the average fee in CO is 10-12%). The manager advertises when my property is not occupied, collects rent, coordinates maintenance when things go wrong, inspects the property before and after a tenant leaves (and once per year to ensure the property is being cared for), and screens the tenant. If you don't want to get a property manager, I would just research craigslist, the newspaper, and online housing sites to see what houses are renting for in your neighborhood. To screen your tenants I would do a credit check on all adults that plan to live in your house and ask for references from their last landlord. Remember to screen good, because renter frequently don't pay their rent and laws in CA are on the side of the tenant, not the homeowner.
A few things to remember: renters usually do not take care of your property like you would, damage can get expensive. Your insurance will go up (mine almost doubled) because the insurance agencies know that renters don't care for properties like homeowners do. Renting has tax implications; if you make money on your rent (you get more in rent by the end of the year than your mortgage) it is taxable income. If you lose money it is a tax write off.

Renting can be great, because someone else is paying your mortgage...but it can be bad if you have the wrong tenants. Screen carefully!

Hope this helps.

Hi M., Sounds like a good idea if you can manage it financially if the renter pays rent on time,etc. If not, you will be responcible for 2 house payments.plus utility bills, etc. Also discuss this with a tax preparer, as it might put you in a different tax bracket. You will have to keep all rental records plus maintanence records for the IRS at tax time. A rental house is extra income and more headache at tax season! My husband and I have kept a couple of rentals over the years, and sometimes they have been a real pain. Think this through very carefully, and good luck if you decide to do it. Sincerely, CJ

Hi M., yes that is a very tough decision. I work for a property management company, who can answer all the questions you are asking. He can determine what rent you should ask for, screenning all potential renters, and manages your property for you. He has many clients that are doing the samething. You can contact Bob Basso at RJ Properties located in San Jose. His phone number is ###-###-####. He manages properties in all areas. Good Luck