Author Topic: Rental possibility in PA  (Read 3229 times)

Bbqmustache

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Rental possibility in PA
« on: March 31, 2016, 04:56:46 AM »
Looking at purchasing a property with a separate garage with a full apt over it.  Rent estimate $750 per month.  Estimate after expenses, lack of renters etc, that rental could net us about $350 a month.  Would use this money for main house maintenance.  What other headaches might we be facing?

ender

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Re: Rental possibility in PA
« Reply #1 on: March 31, 2016, 05:48:20 AM »
... what have you actually factored into your "net us about $350 a month" figure?

We can't read your mind..

Bbqmustache

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Re: Rental possibility in PA
« Reply #2 on: April 01, 2016, 03:10:13 AM »
Apologies.  Figuring 30% empty apt, $150 a month for maintenance and management.  $350 left over.

$500 a month going into a savings account ($350 and $150).  Over two years, allows us two $900 repairs, $2300 for resealing and re-chinking the house (log home) and $12K mortgage principal payment.

Is my $150 a month for maintenance and management too low?

We will be using Cozy for credit reports and background checks, plus rent collection.  $35 per tenant prospect. 

Are there other costs I have not considered?




jnc

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Re: Rental possibility in PA
« Reply #3 on: April 01, 2016, 04:11:46 AM »
Insurance? Property tax?

Bbqmustache

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Re: Rental possibility in PA
« Reply #4 on: April 01, 2016, 04:13:34 AM »
Property tax and insurance escrowed into mortgage, paid from regular income.

Megma

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Re: Rental possibility in PA
« Reply #5 on: April 10, 2016, 11:29:54 PM »
Property tax and insurance escrowed into mortgage, paid from regular income.

If I understand right, you'd be living in the main house and rent the extra apt? In that case, I think you're mainly looking at having other people in your space. The money is obviously beneficial and not so much profit but mortgage reduction (as I assume the alternative is buying the house and leaving the apt empty or buying a different similar priced house).

In return for the mortgage reduction, you'd have other people around. You should think about this. How many people? Will they have loud parties? Hang out in your yard? It's different renting part of your home (I previously rented my extra bedroom, at least you have separation!) than a dedicated rental unit across town.

How much of your mortgage would the apt rent offset? I would think of it like rather than the typical rental cash flow model since its part of your house. In my case it was 60% of all household expenses (my SO and I split the other 40%, so paid very little each) being paid by my renter so it was worth it even though they were at times annoying but eventually, I'd had enough still and needed then space.

Basically, the hassle would be having someone else around who while paying you, might also drive you nuts. So choose wisely 😀 And consider doing a month to month arrangement.
« Last Edit: April 12, 2016, 10:46:47 AM by Megma »