Author Topic: Nervous about renting  (Read 5151 times)

Slam

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Nervous about renting
« on: June 17, 2015, 04:00:58 PM »
Still paying off student loans here, but I often think that the next step is to buy a new house and rent out my old one.

Then the other day, I was getting in the shower and flipped the switch so the water would come out of the shower head instead of the tub faucet.  The pressure difference must have slammed into the water line because the water supply line to the toilet snapped and was shooting water everywhere.  I fought through the spray and turned the water off at the wall.

But that got me thinking...what if that happened to a renter that wouldn't have known what to do?  This is the kind of thing that makes me skeptical of ever becoming a landlord.  Is this solved by simply having insurance?

forummm

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Re: Nervous about renting
« Reply #1 on: June 17, 2015, 04:52:45 PM »
That kind of stuff made me too nervous to be a landlord. That, getting sued, having to deal with people, never knowing when something would go wrong, having extra hours on top of my day job, etc. It wasn't for me. There are some people who really like it. Not me. I'm willing to work a little longer if need be just to not have the anxiety and to sleep a little better. It's good for you to know which kind of person you are before getting into it (if you do).

Retire-Canada

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Re: Nervous about renting
« Reply #2 on: June 17, 2015, 06:17:55 PM »
I've thought about renting out my place and buying another property, but I'm not a people person and I'm not a handy DIY type so that gives me pause.

My FIRE plan involves downshifting to part-time work. For now I like the idea of a part-time job more than I do being a landlord. That's just a personal perspective.

jnc

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Re: Nervous about renting
« Reply #3 on: June 18, 2015, 05:40:58 AM »
Still paying off student loans here, but I often think that the next step is to buy a new house and rent out my old one.

Then the other day, I was getting in the shower and flipped the switch so the water would come out of the shower head instead of the tub faucet.  The pressure difference must have slammed into the water line because the water supply line to the toilet snapped and was shooting water everywhere.  I fought through the spray and turned the water off at the wall.

But that got me thinking...what if that happened to a renter that wouldn't have known what to do?  This is the kind of thing that makes me skeptical of ever becoming a landlord.  Is this solved by simply having insurance?

You give your tenant the number of 7x24 plumber for such cases. And of course, you have insurance.

I own several rental properties and haven't had too much to worry about but recently had a couple of incidents:
- neighbor's tree fell on one of my properties.Several thousands worth of damage. Insurance took care of that one and since it is not my fault, my insurance won't rise as a result. My property management company which does rehabs/renovations took care of the repairs. Total time spent:sending the check the insurance cut me to the mortgage company to endorse.
- in another property, water heater broke in the basement and water was leaking everywhere though thankfully tenant noticed and called my management company. They took care of everything. Time spent: close to nothing, though I have to foot the repair bill since i won't be submitting this to the insurance

So yeah these things happen but if you have good tenants and a great management team in place, you don't have to worry. Make sure to select good cash-flow properties from the get-go so you have an appropriate budge for repairs and other expenses.

Hope that helps.

iamlindoro

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Re: Nervous about renting
« Reply #4 on: June 18, 2015, 08:41:08 AM »
For the example you cited, we're dealing with something that the average person would know.  If there's a water leak, turn off the water.  You want your tenants to exercise common sense, and the quality of tenant you place will have a direct impact on how well they care for your property.  Don't place the kind of tenant who is going to stare at a leak and think, "Wow.  Sure would be nice if there was some way to stop that."

Remember: your tenant has put down a security deposit and doesn't want to be on the hook for damages either!

Lis

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Re: Nervous about renting
« Reply #5 on: June 18, 2015, 12:23:19 PM »
I had that happen to me at my old place. Luckily I was renting a basement apartment in my landlords house, so I just ran upstairs and pounded on the door til they answered (apparently they had a 9:30 bedtime). My landlord and his brother in law are handy and knew what to do. They fixed it themselves the next morning so my bathroom was only out of water for the night (my only hardship was brushing my teeth in the kitchen sink that night and the following morning).

I was very lucky that none of my stuff got ruined or damaged beyond repair, but I was under the impression that if anything had happened, it was up to me and my renter's insurance (which I didn't have at the time... whoops) to replace.

You're perfectly within your right to require your renters to have renters insurance, and what minimums they need to be carrying (my current landlord does at least). As far as what time of insurance you would need, you could always call either your insurance agent or a different company and say you're considering it, what are your costs and liabilities?

Edited to add: Additionally, once you either have a definite renter (or renters) or at least decent candidates, when you're showing them the place make sure you point out "here's the circuit breaker" and all the other important things. iamlindoro is right, I don't think any tenant WANTS to cause damages. That being said, I'm not sure if damages caused by a busted pipe or something like that can be taken from their security deposits.
« Last Edit: June 18, 2015, 12:28:15 PM by Lis »

Bearded Man

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Re: Nervous about renting
« Reply #6 on: June 18, 2015, 12:56:22 PM »
For the example you cited, we're dealing with something that the average person would know.  If there's a water leak, turn off the water.  You want your tenants to exercise common sense, and the quality of tenant you place will have a direct impact on how well they care for your property.  Don't place the kind of tenant who is going to stare at a leak and think, "Wow.  Sure would be nice if there was some way to stop that."

Remember: your tenant has put down a security deposit and doesn't want to be on the hook for damages either!

Some of my tenants are as dumb as rocks. The guy in a lot of cases is worse than useless, he is a waste of time. Couldn't figure out how to light the pilot light. I go and look, it's already lit! There are instructions right on the water heater. He tried to figure it out but couldn't.

Another time there was a leak on an appliance. They let it leak for 2 days before they called thinking it would just stop on its own. Just dumb as F#^k.

Slam

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Re: Nervous about renting
« Reply #7 on: June 18, 2015, 01:28:57 PM »
I know when I was in college, I never had renter's insurance.  If a water pipe had burst, that wasn't my fault or problem.  Perhaps that is an incorrect assumption, and I really should have had insurance.

iamlindoro

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Re: Nervous about renting
« Reply #8 on: June 18, 2015, 01:37:30 PM »
I know when I was in college, I never had renter's insurance.  If a water pipe had burst, that wasn't my fault or problem.  Perhaps that is an incorrect assumption, and I really should have had insurance.

A burst pipe isn't the only problem you can have.  The comment about security deposits was referring to the general issue of tenant-caused damages, not this specific scenario.  In this case, your landlord insurance should cover it provided you are not found to be responsible (negligence leading to frozen pipes, etc).  In the broader scheme, you use insurance, and place good tenants, and you work the numbers for a reasonable number of emergencies and major repairs into your budget before you make a decision to buy the property.
« Last Edit: June 18, 2015, 01:41:20 PM by iamlindoro »

Lis

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Re: Nervous about renting
« Reply #9 on: June 18, 2015, 01:48:48 PM »
So, out of curiosity, had my burst pipe (not caused by negligence - one of those "shit just happens" moments) actually caused any real damage to my belongings (had I left my laptop on the ground, or the soaked rug was not salvageable), who would have been at fault? Would it have been his homeowners insurance, or my renters insurance (assuming I had some at the time, which I did not). Also assuming it was a completely legal apartment, which I'm not sure is true.

iamlindoro

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Re: Nervous about renting
« Reply #10 on: June 18, 2015, 02:04:58 PM »
So, out of curiosity, had my burst pipe (not caused by negligence - one of those "shit just happens" moments) actually caused any real damage to my belongings (had I left my laptop on the ground, or the soaked rug was not salvageable), who would have been at fault? Would it have been his homeowners insurance, or my renters insurance (assuming I had some at the time, which I did not). Also assuming it was a completely legal apartment, which I'm not sure is true.

Very unlikely to be the landlord's problem, though if they were smart it should all be spelled out in the lease.  To hold a landlord responsible, you would have to prove negligence, which this would not be (or if it were, would be very hard indeed to prove).

Candace

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Re: Nervous about renting
« Reply #11 on: June 18, 2015, 02:05:26 PM »
I would share your nervousness. I have a few friends who rented their houses out, and all I hear are horror stories about people living like animals and destroying my friends' properties.

I know the recommendation is to place good tenants, but aren't there rules about not being allowed to turn people away just because you can sense they're not going to respect your property?

Personally I just don't have the temperament or skills to be a landlord, so in spite of all the success stories here and elsewhere, I've decided to steer clear of that. I have a few REIT-related investments and I own my own house. That's as much as I am going to do when it comes to real estate. Props to those who do it and do well at it, but it's just not for me.
« Last Edit: June 18, 2015, 02:07:22 PM by Candace »

iamlindoro

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Re: Nervous about renting
« Reply #12 on: June 18, 2015, 02:12:46 PM »
I know the recommendation is to place good tenants, but aren't there rules about not being allowed to turn people away just because you can sense they're not going to respect your property?

No.  The rules are that you cannot discriminate against them on the basis of their membership in a protected class (as detailed in the Fair Housing Act).  Your best defense against such an accusation is having consistent and high standards with regards to what is an acceptable tenant (best if they're in written form), and always following them.  If you place a nightmare tenant after having followed those standards, then the problem is with your standards.  Articulate what qualities will make you feel that a tenant will respect your property in your standards, and use the failure to meet that standard as your basis for the denial.  Maybe it's a history of positive references from landlords and neighbors.  Maybe it's excellent credit and no criminal or civil case history.  It's up to you to say.

Elderwood17

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Re: Nervous about renting
« Reply #13 on: June 18, 2015, 07:32:34 PM »
We have friends that run a dozen rental properties and all goes ok.  We rented our first home out for two years and it was a nightmare of late payments, damaged property, etc.  in retrospect it was probably only slightly worse than "typical", but I think you have to have the right tempermant to be a landlord.  I didn't.

Slam

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Re: Nervous about renting
« Reply #14 on: June 19, 2015, 12:06:49 PM »
We have friends that run a dozen rental properties and all goes ok.  We rented our first home out for two years and it was a nightmare of late payments, damaged property, etc.  in retrospect it was probably only slightly worse than "typical", but I think you have to have the right tempermant to be a landlord.  I didn't.
Aside from being a pain in the ass, how did it work out for you financially?

clarkfan1979

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Re: Nervous about renting
« Reply #15 on: June 20, 2015, 02:48:25 PM »
If it happens when you are not there, the tenants call you and you call a plumber. I will echo what some other people have said. It's about personality and wanting to be a landlord. The same exact thing can happen to two people and they have a very different reaction to it. I don't get upset. I just call the plumber. Most repairs are expected and you can see them coming. When you have old appliances and old carpet, you should be saving and it shouldn't be a surprise.

adamcollin

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Re: Nervous about renting
« Reply #16 on: June 25, 2015, 03:46:26 AM »
Renting a home is not an easy task. There is a long list of 'to-dos' that landlords must keep in mind. A smart way of dealing with it is to hire a pro. It becomes much simpler after that.

rachael talcott

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Re: Nervous about renting
« Reply #17 on: June 25, 2015, 06:33:51 PM »
I give all my tenants a "curb key" and show them how to use it to turn off the water main in case of a burst pipe.

Think of it this way.  Any investment carries a risk.  Stocks can go down, businesses can go belly up.  Cash is eroded by inflation.  With rentals, you have the buffer of insurance, and price volatility is less than you'd get from stocks.