Rental Issues

[bringmagicback]

I think im going to end up renting my house out in lieu of selling. I put an add on craigslist and received several replies, interestingly enough every one of them mentioned some type of medical condition they had in their reply not sure why. Have a person looking now that seems to be ok, non trashy, decent job etc. But she is looking to move in w/ her b/f and they are both about 19/20 years old but have a kid together. This is a very small town (about 3k people).

What issues have you guys had while renting. I can deal with people not paying rent and just kicking them out. What about damage to the house, if they leave a 1k deposit and do 5k damage, can you get that damage paid for?

Is it true you cant kick people out for non payment in the winter months? Had a sheriff deputy tell me that.

What other issues to consider?

 

[Cyclonepride]

Just kicking them out sounds easier than it is. I would guess they mention that due to being on some form of housing assistance? Not really sure.

 

[Incyte]

You'll wish you would have just sold at a loss. Eviction isn't as simple as "kicking someone out." Also, you aren't going to recover $5k worth of damages from people that don't have much money to begin with.

 

[mywayorcyway]

You'll eat any damages in excess of the deposit. It's virtually impossible to get back, even if you win a judgement in your favor. You'd need to be talking $10,000+ to make it worth fighting for and even then you'll be lucky to recoup 50 cents on the dollar.

Eviction is also much more difficult than it sounds. A crafty renter could stay in the house a long, long time without you getting much.

Unless you're committed to managing properties and prepared for what you're getting into, Incyte is probably right saying you'll wish you had sold at a loss instead. It can be a real PITA.

 

[Sparkplug]

I always check Iowa Courts Online for each applicant. It's amazing the record some normal looking people can have.

Arrange it so that you replace the furnace filter. That way you enter the house every three months and you have an idea if damage is being done.

If they can afford $1000 deposit + rent you might be okay

 

[mcblogerson]

I don't know if the laws are different than where I live in Ohio.
Best case scenario you can have someone removed from the property in about 3 months. You'll never see a dime if you take them to court and they'll trash the place out of spite. Luckily I've never had it come to that.

Ask for references from former landlords. Their reaction to that question is a good start to weeding out the undesirables. Run a credit check, ask for pay stubs and get a deposit worthy of the property.
If you do end up with a squatter, offer them something to leave. Most losers will take cash to disappear and leave the place no worse than they already made it. It's worth it to get them out now, and get it rented asap.

Rent it high enough that you're making money every month. Get a good tax person to explain all the advantages of when to buy and sell. Save every receipt that even remotely relates to your investment property, its all tax deductable. There's good money to be made if you play it right, get decent renters and can stomach some bad ones.

 

[cycloneworld]

I have 6 rentals and here is the process we follow.
1. Interested parties fill out a pre-application with their information, job, wages, rental history, etc.
2. Narrow it down to the 1-3 people you think are good fits based on our rental criteria.
3. Have them fill out a background check (we use www.mysmartmove.com). This checks credit history, criminal history, evictions, etc. and gives you a score and rental recommendation.
4. Use a solid lease agreement.

A couple of pointers:
1. Make sure you treat everyone the same and follow fair housing laws. We have a set rental criteria to follow (no major criminal history, no evictions, etc.) and tell people that up front.
2. Evictions suck but the process is much easier now than it was many years ago.
3. You can go to small claim's court to get a judgement for the damages above the deposit but your chances of collecting are pretty small. We've found most people treat the properties with respect.
5. Follow the eviction process exactly if you have issues. You can google it but there is a very specific process you'll need to follow. And yes, you can evict in the winter.

 

[cycloneworld]

You'll eat any damages in excess of the deposit. It's virtually impossible to get back, even if you win a judgement in your favor. You'd need to be talking $10,000+ to make it worth fighting for and even then you'll be lucky to recoup 50 cents on the dollar.

Unless they REALLY trash the place, that's not necessarily true. Small claims court is easy and inexpensive. But you are right about collecting, I'd say 50 cents on the dollar is high.

 

[Cyclonepride]

I've had 3 renters for my place. First was a good friend. Overall, not terrible but not great. Always paid but messed up the house a bit. Fixed most of what he messed up. Second took reasonable care of the place, but did have some kind of pets upstairs that stained the carpet. Then my parents moved in, and of course it's been great since then.