[Question] Being a landlord

[Anonymous]

I'm not really sure why I'm doing this anonymously, but I am.

I'm looking at renting an apartment in a pretty trendy part of town, and obviously that means they're somewhat pricey. I've noticed though that there are houses that have been converted into duplexes in the area that are pretty reasonably priced, and if I live in one, and rent out the other, it means I would be essentially living rent-free. Not to mention, the payment would be affordable even if I didn't have a tenant.

I'm trying to get a clear thought on the pros and cons of this before I make any decisions (haven't actually looked at these places yet), and I believe we've had some landlords on this forum so I thought it'd be a good place to ask. Obviously I'd have to be responsible for maintenance issues, but my general thought process is that it could be an affordable way to live where I wanted to, and if I decide to leave down the road I could either sell it, or just have the rent money from both places, as opposed to renting where I'd have nothing (but obviously greater flexibility).

 

[phil]

Not a landlord but that's for sure something I'd jump at if it were me. In my area places where you'd be renting from an individual like this get a lot of offers quickly. I've seen listing on things like zillow get snatched up in a matter of hours. I'm sure they're able to really be picky about who's renting from them.

Anyway, even if you re having doubts I'd still look into it heavily. I think /r/realestate has links and guides for landlording

 

[Thread Necromancer]

If you're in the Bethlehem PA area or within XX miles I would want to jump on your place. I'm still having an insane issue trying to find a place to live and I'm supposed to be there in a week. I make the money (reasonable money anyhow) but my credit is shit and ..... well, still can't find a(n affordable) place.

 

[strawman]

Unfortunately there are too many variables to give anything but broad generalizations.

If the units are in good condition, and are in an area good for renting with reasonable renters, then you'll have a relatively easy time finding renters that won't trash the place or constantly bug you for minor issues. Being right next door does increase your workload in small problems, but decreases the time it takes to resolve them. In a good situation that balances out, but with picky and/or whiny renters it can be frustrating.

Plan on the unit being empty 2-3 months a year in a high turnover area (college rentals, for instance) and plan on a few hundred dollars each time you switch renters and yearly for maintenance that is just due to normal wear and tear (carpet every 5-10 years, paint every other year, replacing worn fixtures/appliances, etc).

In other words, while on the surface it looks like you'll be able to have them cover the mortgage, there are a lot of other expenses that will tip that equation into, "Well, perhaps the equity will be worth something someday" versus you actually saving much money.

Lastly, read and re-read all the local and state laws regarding renting. There are a lot of traps you might fall into and become liable for monetary damage if you make a mistake - for instance in many places you can't save anything they leave behind, even if it appears important. Found an urn of someone's ashes after the renter left? It has to go with all the other stuff (usually the curb) and you can't hold it aside with the intention of finding them and trying to return it. The best of intentions can sometimes hurt you financially. You have to understand the eviction process. If you make a misstep not only will you lose any money they owe you on rent, but they may be able to sue you for damages if you don't follow the eviction process exactly. Ideally you don't run into that problem, but even in good areas renters can fall on hard times. In fact some renters want an official eviction notice because they then become eligible for aid from various organizations or the government. It can take months to properly evict someone, and if you don't meet all the obligations and legal requirements of being a landlord in that time (for instance one smoke detector fails a test) then the eviction process can be reset because you aren't keeping the place in livable condition. Some places also require regular government inspections, so make sure you understand that process if you want to avoid fines.

Do some market research before you buy the place, and make sure you understand the rental and homeowner market you're considering. Drive the area, call up some other places for rent and ask the landlords for information. A little legwork here will save you a lot of regret later.

 

[fade]

Every experience is different. Every tenant is different too. My wife and I rented out 3 houses in Bryan TX for 5 years and I was happy to see the back of it. It was a lot of work. Even the nice tenants always seemed to need something. If the house is in good shape it could be easy. I know that's not all that helpful but like steinman said there are a lot of variables.

 

[PatrThom]

Just don't be like this guy.

--Patrick