Own a house, getting married

[Sarahswhere]

Hi everyone. I own a house that would make a great rental, and we're considering doing a furnished/vacation rental since I'll be moving to his house when we get married. I know a long term rental would be ideal, but we'd like to do some work to his house and want the availability to stay there while we're working on his house. Not to mention the hassle of selling everything inside.

The house right next door to mine is similar and is a furnished/vacation rental on VRBO.com. The house is in a downtown area close to restaurants and activities, and a private college within blocks. The good thing is we can easily afford to keep it without a renter. Our total income is around $125k. I'm an airline pilot, he's a plumber but has skills beyond his trade. We have no debt other than our respective mortgages and each mortgage is $800.

So, tips, advice, recommendations, horror stories? I welcome it all...
1. Should I include cable, Internet?
2. Add air conditioning?
Sarah

PS, the house has beautiful new front and back doors,  brand new windows, and we're building a new deck in the back soon.

[lifejoy]

I have no advice, but wanted to say: the house looks really cute!!

[cerberusss]

It's hard to give advice in the absense of numbers. What do you expect to get in terms of rent? Do you want to maintain the rental yourself, or outsource? What do you expect to spend maintaining the place?

Consider that not all renters actually pay the rent. A friend of mine got into an awful situation when his renter stopped paying and he had to borrow from his parents to pay the mortgage. A long battle in court got his renter ejected, but not after he lost thousands of euros.

He also had a good renter who paid on time, but who had a nasty habit of calling in the evening whenever Internet or TV would stop working.

Another one who tried to fight every yearly rent increase.

Be prepared for this kind of stuff, although it might never happen, it's better to be (mentally) prepared.

To summarize, will your rental property do better than other forms of investment like stocks or bonds? How much better?

[Sarahswhere]

If we were to long term rent it, I think we could get $1000-1200 per month based on other rents in the area.  As a vacation rental, the lady renting the house next door on VRBO gets anywhere from $99-$150 per night, and has it rented about half the time.  Right now it's at $148.  Here's the listing: http://www.vrbo.com/314210

I would maintain the rental myself since I live local, and his house is only about 5 miles away.  I would never have to borrow to pay the mortgage since it's easily affordable for me even without a renter.  I'm not only using the house as an investment, I have a fully funded Roth IRA and Thrift Savings with the military.  He has a full pension from the union, and a 401K.  It would just be an added bonus on top of investing.  If it works out and I like doing it, we would consider buying other rental properties in the future.  We're also planning on putting in artificial grass because the water restrictions here are getting to be unsustainable for a lawn and it would be less maintenance.  A friend of his has a landscaping business and we could get a good deal on material and installation.

I'm not sure we could sell it right now without taking a hit on capital gains.  I just bought it within the last year, but at least it appraised for $35k more than the loan. 

Thank you for the information so far, I've definitely heard several horrors about renters.

[Mustache Fatty]

Yes, I think I would give it a shot.  I have used VRBO off and on for 10 years and if your neighbor is actually renting his/her house like the calendar suggests (as opposed to blocking it off) then I would say go for it.  I have not had any real problems (knock on wood).