Author Topic: Forgoing 25k... Am I crazy? A potential landlord's dilemma  (Read 3863 times)

WorkingToUnwind

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My husband and I are leaving in April to travel the country in our retrofitted sprinter van for an indeterminate amount of time. Six months? A year? We've spent a bunch of time trying to find a renter for our home, but no luck yet. I think we have it priced a bit high, and lots of applicants have had bad credit or an inability to provide good references. We'd rather not rent it than rent it to someone who's going to be a huge headache.

We have about 500k in savings, between our 401ks, stocks, and cash. We wouldn't notice the financial hit if we didn't  rent it out. I'd like to give myself permission to simply take the 25k that we would've made renting out our home and covering utilities, and just leave it vacant.

How many face punches do I deserve? What would you do if you had the cash reserves?

Nick_Miller

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #1 on: March 07, 2018, 10:09:00 AM »
I can't think of anything more likely to ruin a cross-country trip than a constant stream of worries and concerns about an undesirable person living in your home.

Yes, renting to a responsible person would be optimal. But, renting to a trainwreck of a person would be the worst possible situation. Leaving the house empty lays in the middle. (I'm guessing you'd have a friend/family member check in once in a while).

Do you have a security system or cameras or anything? Just a small suggestion. We have an inexpensive camera system (Arlo) that sends "motion" messages right to your phone. Yes, there are LOTS of false messages, but if I was going to be away for as long as you will be, I might look into it.

Enjoy your trip!!!!

Nick_Miller

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #2 on: March 07, 2018, 11:21:02 AM »
One question that that wasn't clear...is all of your stuff (furniture, etc.) staying in the house? I'm assuming you're planning to return after your trip?

I know opinions vary, but I wouldn't rent out my house to a total stranger if I wasn't going to be around, and that becomes a "double no" if all my stuff was staying in the home. That just seems gross, for lack of a better word, to have a stranger sleeping in your bed, etc. How do you know they wouldn't steal stuff or just trash your stuff?

And to address the net worth issue Liberty Stache brought up, how much is your house worth, and how much equity do you have? I ask because while yes, lost rent of $25K is 5% of your net worth, I'm guessing your house equity is more than 5% of your net worth, and thus the prospect of an undesirable tenant trashing your house while you're gone is a lot more disruptive to your net worth than is missing out on rents.

My wife works in property management. She sees what people do to rentals. And that's WITH a property manager on site. I can't fathom what they would do in a long-distance landlord situation.

Catbert

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #3 on: March 07, 2018, 12:11:14 PM »
I would really try to avoid renting my primary residence - especially furnished - if I planned to move back in.  As a landlord I've seen what (some) renters can do to property.  With rentals its the cost of doing business and not personal.  (Obviously keep security deposit and maybe sue them.)  But with your personal residence it's, well, personal.

OTOH a vacant property is a problem also.  Do you have a family friend, responsible former co-workers, or someone who would be responsible and thankful to get below market rent to live there and keep things on track.

WorkingToUnwind

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #4 on: March 07, 2018, 02:29:15 PM »
We were hoping to have a friend move in for cheap rent, but no luck finding anyone who's lease is up. We do have neighbors who could check in on it if it's vacant.

Renting it furnished would be the easiest path because we wouldn't have to move our furniture out. However, most people come with their own furniture and don't want to have to put their own stuff in storage. So we'd end up getting rid of a lot of our furniture, because the furniture is not worth enough to justify paying for storage.

We probably have 75k in equity at this point. And we just renovated the kitchen. Nice new white cabinets and granite countertops. Our septic is old, and I fear it will give out while we're away, especially with a family of four or five living there.

Dicey

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #5 on: March 07, 2018, 02:41:08 PM »
Years ago, pre-internet, I was on a four month job assignment in San Francisco. A doctor and his family were heading to Europe for the same amount of time. I found them less than a week before they left. They wanted a deposit on their lovingly restored Victorian, but my company didn't speak that language. Instead, my company agreed to pay the full rent up front. It was a great experience for everyone, so don't give up hope and don't believe that everyone is bad. (Yes, I am now a very experienced landlord.)

Here's another idea: Is there anyone you know that is struggling to get ahead financially who could benefit from six months of rent-free (or utilities only) house sitting? I can think of several people in my life who would be trustworthy and could really benefit from this kind of a break. You'd have the freedom from worrying about an empty house, as well.

ChpBstrd

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #6 on: March 07, 2018, 03:00:16 PM »
The entrepreneurial side of me wonders:

1) Are there people/companies that will run your house as an  AirBNB in exchange for a cut of the proceeds?

2) Are there construction workers who would, for example, remod the bathroom or replace the septic (upfront of course) in exchange for 6-12 months of free rent?

Regarding your stuff, I bet it could all be shoved into a bedroom and locked up during either of the above activities.

WorkingToUnwind

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #7 on: March 08, 2018, 09:32:53 AM »
If we don't end up renting it at all, we do have a very broke friend who would gladly housesit, pay utilities, and do snow removal/lawn care. She may be moving out west in the next six months, so it's not a permanent solution.

We decided to lower the rent and try to rent it out as two bedrooms. The third bedroom is much smaller and we could store most of our stuff in there. It will also put us in the price range of a younger couple or two roommates. With just one bathroom, we were having a hard time appealing to the families who liked that it was three bedrooms. We'll see!
« Last Edit: March 08, 2018, 09:34:26 AM by WorkingToUnwind »

FINate

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #8 on: March 08, 2018, 09:57:01 AM »
Six months to a year? I don't think it's worth the hassle to rent it out.

The only things I would possibly consider:
1) Furnished rental for someone on short term work assignment, along with a property management company. Not sure if any property manager would want to take a short term like this.
2) Third party managed AirBnB (does this exist? seems like this should be a thing).

You really don't want to be in the middle of nowhere trying to navigate a plumbing issue, which is why you need someone to manage the property while you travel.

Carefully check your state and local laws regarding landlord/tenant rights and requirements. There may be permits or inspections involved in having a rental, and once someone is paying rent they become your tenant along with whatever tenant rights that come along with it. How much notice do you need to give to evict, how long might you be sans house if they fail to vacate, would you be on the hook for any relocation fees or whatever. This may all sound crazy, but it's happening in my city because rents are increasing a crazy amount so the city passed an emergency freeze on rent increases and evictions.

If I were you, I'd have the broke friend house sit. Keep an eye on the place and don't charge rent (therefore a guest rather than a tenant).

Or if your areas is very landlord friendly, have your friend stay rent free and manage the place, and rent out the two other bedrooms. 

mcneally

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #9 on: March 08, 2018, 11:08:49 AM »
If you decide to leave it vacant, check with your insurance company. If they find that you left it vacant for several months, they will likely void any claims unless you purchase a special policy for vacant property. I know a guy who slowly fixed up a house over a year and when it burned down he got nothing because the property was vacant which wasn't allowed in his policy.

Cwadda

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #10 on: March 08, 2018, 11:53:47 AM »
What area are you in? I'm a property manager and would happily take care of it all when you're away, completely hands-free! :) 

WorkingToUnwind

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #11 on: March 17, 2018, 04:23:39 PM »
We signed a lease with a great tenant yesterday. I took the advice of one of the posters and dropped it from three to two bedrooms. We lowered the rent accordingly and all of a sudden were inundated with showing requests. We ended up finding a wonderful woman to rent the place, and it will be just her. We're using the third bedroom to store all of our stuff. I'm relieved!

marshmallowaddict

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #12 on: March 17, 2018, 06:01:45 PM »
Awesome news :-)

Dicey

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #13 on: March 18, 2018, 10:39:37 AM »
Hooray! I hope she loves your place and takes as good care of it as I did the house in SF I mentioned upthread. I still drive by it occasionally and wish them well.

I hope your upcoming adventure exceeds every expectation!

WorkingToUnwind

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #14 on: March 21, 2018, 10:14:37 AM »
Thank you :)

WorkingToUnwind

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #15 on: November 18, 2018, 01:04:17 PM »
Quick update:

The tenant has been great. The house on the other hand has been misbehaving. Seems every month there is something new to handle. All manageable things (shower faucet stopped working, boiler leaking, garage had minor flooding during unusual fall storms, septic backed up) but surprisingly stressful to manage from the road. I think we're getting the hang of it though and coming to terms with having to pay a premium to get problems dealt with from afar. Sadly, any time I get a text from my tenant, I get super nervous that something new has come up. She has been great about paying the rent on time, the place is immaculate, and she cares enough to alert us to house issues. So overall, a win and a good first experience with the realities of landlording.

I'm a red panda

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #16 on: November 21, 2018, 07:37:58 PM »
This is why we sold our rental property.
Amazing tenant. Stream of stressful issues.

Wasn't worth it.

DoNorth

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Re: Forgoing 25k... Am I crazy? A potential landlord's dilemma
« Reply #17 on: November 23, 2018, 12:10:39 PM »
I felt the same way with our tenants for a home we owned in WA and selling was the biggest relief.  We built a house in the US from 2015-2018 and then I took a job overseas for 2-3 years and we left it vacant, despite the fact we would have profited $10-$12K/year had we rented it.  Having my parents close by to look after it and the peace of mind is completely worth the missed revenue.