Anybody own a rental house?

[tripleBfarms]

I bought a small farm next to me this week. Farm Credit said, "just sign here" and i did. Now I have to figure out how to pay for it. It has an old house on it, that is in decent shape. It is liveable now, but I would hate to market it the way it is. I believe i can spend $2500 on the house and have it looking nice, with paint, a few windows, cleaning, and a few odd and ends. I believe I can get about $250, or $275 a month for it. Not great, but it would sure help make the payment. I would appreciate any advice from those of you that have, or have had rental houses in the past. Thanks.

 

[skyhightree1]

Been there done that and boy was it a P.I.T.A what catches my eye about your circumstance is you would be getting no more than 275 per month. I see what you are trying to do but when I had my very first house it was a 3 bdrm rancher my grandparents gave me. I rented it for 925 a month and had a rental agency find the occupants and do all the bs legal paperwork for a small fee. I had some trashy people move in had motors in the back yard car parts everywhere and looked like a junk yard there after 1 year i wouldnt renew lease and the mf's wouldnt leave had to have sheriff evict them then they had jacked my walls up and the 2 month deposit they paid didnt even cover the damage they did I had to come out of pocket for a lil over 2k and they tried to sue me to get there money back from deposit. I counter sued won and im still getting there tax refunds every year maybe in 2 years I will have my money back this fiasco started 7 years ago. You also have to be ready if heat goes out to put them up in a hotel until the heating system is fixed if they have one or if septic issues take place or anything that makes the place not livable and if you dont be prepared for a law suit. If a water tank bursts or any major problem be prepared to come out your pocket or fix yourself. for that amount of money it would seem to be more headache than benefit IMO

 

[Bigfoot]

I have one rental house now. The same person has been in it for 17 years. They even put in an above ground pool, go figure. I have had as many as 3. They were one of the biggest pains in the butt that there ever was. Just my opinion, a person fooling with rental property needs to have enough houses to make it a full time job. I know people that have rental property, and do very well with it. Almost every renter that I ever had left owing me money. I am too soft hearted, and accepted excuses instead of checks. The house you are talking about will inevatably, and with out a doubt attract the wrong kind of person. One house I bought because I never liked my neighbors. Guess what, I never liked my renters either. At less than $300 a month rent, that could quickly be eaten up with repairs. Renters are rough on everything. I honestly had one continue to use a broken toilet for several days before they bothered to tell me it was broken. Other people will call you at midnight to tell the faucet is dripping. It's a rat race I never want to enter again.

 

[Howdyjabo]

I rented a farm house that come with some property I bought-- Should have just bulldozed it down right from the start.
when I bought it there was a nice lady living there, so I spent some money and fixed it up for her. She died, and every one after that was a nightmare.
Given a chance at a do over, I would have found her a nice place, paid her first and last months rent , helped her move. And I still would come out ahead.

 

[1982vett]

I bought a condo in the early 80s when I moved away from home. Lived in it 8 years and bought a RTC house (one of those from the housing/savings and loan busts). Got a good deal on the home but wasn't going to sell for what I could get for the condo....Rented it (through a realtor friend) and cash flow made the house payments. In the mid 90s when the housing market recovered I sold it. Renting earned about 5% on the cash flow. When I sold I made another 23%.

In the right area, the right properties, the right people, the right circumstances....A LOT OF LUCK....you might do OK. It is probably a bigger risk than owning cattle.

 

[greybeard]

I bought a small farm next to me this week. Farm Credit said, "just sign here" and i did. Now I have to figure out how to pay for it. It has an old house on it, that is in decent shape. It is liveable now, but I would hate to market it the way it is. I believe i can spend $2500 on the house and have it looking nice, with paint, a few windows, cleaning, and a few odd and ends. I believe I can get about $250, or $275 a month for it. Not great, but it would sure help make the payment. I would appreciate any advice from those of you that have, or have had rental houses in the past. Thanks.

My advice? No no but he77 no!
Read your sig.

 

[Stocker Steve]

A LOT OF LUCK....you might do OK. It is probably a bigger risk than owning cattle.

You don't hear that very often...

There seems to be a number of "lost boys" in the country who like to work outside but don't have the cash to buy into an operation. What about charging a reduced rent, or even no rent, to someone who does some chores each day and perhaps runs a few head of their own?

 

[Craig Miller]

Im glad you brought this up. Im looking at 50 acres with a house on it too small for us to live in and was thinking of renting it.

 

[papavillars]

Kept every house that I bought since I married. They can be a pita but in the long run so are cows. The write offs are great, a good contract and quarterly visits sure help. I would ask more money to cover problems or as suggested a starter family that wants to run a couple of cows. Local ag teacher would probably know some kids just wanting to start their own herd.

 

[M.Magis]

In many places there are rental companies that will take care of a lot of the details for you. I'm not sure if that's available where you are or not, but any realtor should know.

 

[Anonymous]

Why go through all that hassle and headache for 250/month?

 

[cow pollinater]

We've had a few run-ins with rentals. About the only time I've seen it not be a major headache is when it's an upscale place worth some money and a management company was hired right off the bat. For what you're looking at in rent I'd doze that sucker so fast it would make your head spin... nothing but problems will come out of that.

 

[Jogeephus]

I have a rental house that is on some land that I bought for the sake of the land. I've had various renters in the house and had some problems. Was ready to just let the house stay vacant when I was introduced to a couple through a friend. This couple had a stroke of bad luck from the economy and they needed a place to live. They offered references which I checked into and got glorious reviews from their past landlords so I rented it to them. Best renter's I've ever had and I have even considered lowering the rent because they are an asset to the home and not a liability.

 

[MO_cows]

We have a couple properties on a "rent to own" plan with family members in them and it's working out just fine.

As cheap as you are talking about renting it, you will not attract an ideal renter. Low rent usually attracts low life type of people has been my experience. On the other hand, maybe thru church or your other contacts you could find someone who needs/deserves a break and comes with a recommendation. A win-win, they get a cheap place to live and you get your expenses covered. But just to advertise it out to the general public, I wouldn't do it.

Edited to add - what Jo described above would be ideal.

 

[tripleBfarms]

Thanks for all the replies. I have a $5500 / year payment to make, so thats why I'm considering it. The house is too good to tear down, and I could sell it for about $25000, but I dont want to do that. I want to stay in control of who my neighbors are. My wife and I rented a dump for $200/month, for 3 years when we first got married and saved a big downpayment on a farm and house. We were the perfect renters, and I keep thinking that surely there are some good ones out there, but I know the odds are slim for that kind of house. I appreciate the insight. I hadn't thought about letting someone live there in exchange for labor. That might work out, and help someone at the same time.

 

[skyhightree1]

Thanks for all the replies. I have a $5500 / year payment to make, so thats why I'm considering it. The house is too good to tear down, and I could sell it for about $25000, but I dont want to do that. I want to stay in control of who my neighbors are. My wife and I rented a dump for $200/month, for 3 years when we first got married and saved a big downpayment on a farm and house. We were the perfect renters, and I keep thinking that surely there are some good ones out there, but I know the odds are slim for that kind of house. I appreciate the insight. I hadn't thought about letting someone live there in exchange for labor. That might work out, and help someone at the same time.

Keep in mind if something major breaks you are still on the hook no matter what.. You also need a very detailed contract. If you are exchanging work for labor you need to give them a pay rate they agree on and iron every detail out because if you just say in exchange for labor they could cut grass in the yard and refuse to do anything else potentially and guess what since it wasnt spelled out exactly you have to deal with that. I personally would keep it and fix it up with any spare money i found till it was really nice and could really benefit from the $$$ it can make 250-275 is not worth the time or headache HE11 1000 A month and aggrivation isnt worth it.

 

[slick4591]

The good ones are looking for something better and they are willing to pay for it. I have an efficiency apartment in my shop directly behind my house. I rent it for $700, bills paid. I've had one renter and he was a really good one. I get calls all the time and people complain about the price. When someone comes along willing to pay that price, then I have a possibility. Learned from another rent property that I owned. It'd be easy to lower the rent and rent it to the first jack leg that came along, but I'd screw myself.

 

[Jogeephus]

Thanks for all the replies. I have a $5500 / year payment to make, so thats why I'm considering it. The house is too good to tear down, and I could sell it for about $25000, but I dont want to do that. I want to stay in control of who my neighbors are. My wife and I rented a dump for $200/month, for 3 years when we first got married and saved a big downpayment on a farm and house. We were the perfect renters, and I keep thinking that surely there are some good ones out there, but I know the odds are slim for that kind of house. I appreciate the insight. I hadn't thought about letting someone live there in exchange for labor. That might work out, and help someone at the same time.

I wouldn't do that. Make them pay for the rent and if they do work for you pay them money back. Money has tangible value where the value of work is subjective. There are some good people out there but like said, don't start the rent out to cheap. Also, don't try to do a lot of fixing up before hand because most do not care and will not appreciate the effort. My renter wants the house to suit them and they have taken it on themselves - with my permission - to paint and do work to the house. Though they didn't ask I asked them to give me all the bills for materials and for the curtains and window treatments and I reimbursed them for the expense on the condition everything stays with the house.

Be firm, clear and fair up front and it can pay off. You've reminded me of all the crap I went through to find a good one and how I need to knock some of the rent off the house cause I want to keep these people as long as possible.