Rental House

[jkwilson]

Neighbor's place is for sale. In spite of the commandment, I've coveted his barn, pond and land for a long time. He wants to sell it as one piece with the house. I'm considering it, and trying to decide if it would be worth the hassle of renting the house out, or just buying the whole thing and putting the house and a little ground back on the market. Property has within the last ten years had: New HVAC, new wiring, new siding, new roof and sheathing, insulation upgrade, new windows and significant bath and kitchen remodel.
A positive side of renting is I would be able to still use the well at the barn. I had thought about offering it for rent optionally with stall privileges and 3 acres of pasture in the event a horse lover was in search of someplace that would allow them to have horses.
Property is less than ten miles from the region's second largest employer.
Anybody have any comments?

 

[dun]

If you can buy the land, buy it. Worry about the other incidentals later. Last time I checked they aren;t making anymore land. Also knowing who your neighbor is (in this case yourself) is worth a lot.
We're looking at doing the same thing with the dairy that ajoins the back of our place. Don;t need, can;t really use it, but at least I'll know who has it and how it's being used

dun

 

[Hillside farmer]

I'm in the process of purchasing the 63 acres next to Dad's place just so we control it and it doesn't become a subdivision. Probably only 35-40 acres usable for cattle but worth the peace of mind to Dad and I.

 

[milkmaid]

We bought the 25 acres surrounding us -with neighbor's house- and have rented it to various folks over the past five years or whatever it's been. Some renters are good, some we're happy to see drive off for the last time (LOL), but the land has definetly been worth it. It surrounds us in a horseshoe shape, and we acquired an 8 acre hay field, lots of pasture, canal access, large barn (in need of repair), half a dozen small pens and sheds with the property and home. Really glad we own it.

I had thought about offering it for rent optionally with stall privileges and 3 acres of pasture in the event a horse lover was in search of someplace that would allow them to have horses.

We've done that - offered a shed and small pen to one renter. Renter wanted a "turnout" place for his horses, so we graciously allowed him to fence off an small area near the pen for his horses. I'd always thought "turnout" meant the horses came out for a few hours a day for exercise and grazing and then went back...apparently I was wrong. They were out there 24/7 and went from one horse (original agreement) to six horses. Had to have a little discussion over that one.

Can't say as we're real fond of renting to anyone with animals - tried the dog thing once and it also didn't go well.

Perhaps it just depends on the renter, but so far we haven't had very good luck doing it that way.

 

[Crowderfarms]

I'd buy the place and rent out the House. When I showed it to a perspective tenant, I'd tell him the way the place looks now, is the way I expect you to keep it. I wouldn't sell the land and the lot, you may end up with someone from the Taliban, at least that would be what would happen if I did it. I'm still buying surrounding property around us. It's like a checker game. But it gives you Peace of mind, and lets you have control of what goes on around you.If you rent to Horse owners, I'd watch out that you put a limit on a number of head.

 

[mitchwi]

As long as you are close by, the rental option would be my choice also. Excellent way to "write-off" a good portion of the purchase price thru depreciation of the house and improvements, because in most instances, the land that you want is the less expensive part. As long as the land is appraised at "farm value" vs "development value".
Weigh your options...especially the $$ side. If your getting the $$ from the bank, remember they will only allow 75% of the potential rent income to be considered for income to you, they keep back the other 25% for repairs/maintenance/upkeep. The real estate taxes and insurance is on top of that. Some "investor" types might want you to look at the "cash flow" side of things, and also might say you should be getting a return on investment after 8 years. I say, if that return doesn't happen for longer, if it sits right with you, then thats ok, because perhaps (as in your case) it is not all about the money, there is many long-term benefits outside of the dollar.