Big Decision to Move into Renting Property

[Rem]

Haven't talked to you guys in a while. Been busy putting my ducks in a row. I had a nice conversation and finally convinced my wife which was the biggest road block to take our home we moved from and dump a little money into it and begin renting it out.

It's a 2,000 sq ft New England style home which needs new wiring and a little TLC in order to rent it out. We have decided to do this since we are currently paying a real low mortgage which was locked in 15 years ago and don't have a ton left on the principle. The amount we could rent it for would easily cover mortgage, insurance, and taxes with a little left over for repairs, maintenance etc. Basically enough to pay for the expenses.

The key would be to continue to do this at least until the house is paid off, then we could take in profits what the mortgage payment was. Anyway this is our first real attempt at becoming a landlord

We probably won't be ready to rent until Spring but we have people who work for my wife who sometimes need a place to stay. This could be a nice opportunity to house employees who work for her.

So things are looking up in this regard. If this works out well, we may replicate this model and purchase another rental property...

 

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[Bilgefisher]

Well done. This is exactly what my wife and I are doing. If your looking for tips, let me know. There are some good steps to take moving forward. Have a plan to run a business. Anyone who doesn't treat landlording as such will be doomed for failure.

Trust me when I say the 1st year as a landlord is an amazing eye opening experience.

 

[NoMoneyDown]

Good job, and as Bilgefish said, the 1st year landlording is something 100 books on the subject can't prepare you for. It's just something you have to experience. Like reading all about skydiving and then actually experiencing it.

Without knowing the details of your situation, have you thought about refinancing or getting a HELOC? Rates are extremely low now, so the payment may even be better than what you are currently paying, plus you'd have the benefit of having cash in your pocket for repairs, etc. I'd definitely talk to a tax strategist first, though, but you could end up saving a lot of dough - especially once you realize all the perks with having a rental business.

 

[Rem]

Hey thanks guys. I would love all the advice I can get. I am planning to spend the winter reading up on renting, real estate, etc. Right now the house we plan to rent is actually owner financed and our monthly payment is very very low. I wouldn't want to mess with that. We know the people who sold the house to us 15 years ago and there was a time period of about 18 months they allowed us to stop making payments while my wife was finishing up school. They have been really good to us and we have been loyal to them in that we have actually doubled payments since that time to make sure we are back on track. With this sort of arrangement we feel it would be advantageous to convert to rental and not simply sell out.

 

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[jrmartin]

Congradulations on moving up to landlord status!!! Like everyone else said, its an experience that cant be read about in any books! Plan on becoming really handy around the house, it will save you a fortune in the long run!!

 

[TSE]

Good luck. We have found income properties to be great option for us. We purchased four distressed properties over the last five years. We add a little sweat equity. Income property has added to improved our cash flow and we are building equity. There have been some hiccups but mostly a positive experience. I recommend doing everything yourself if you can. Hiring it out is expensive and often you can do the job yourself and learn a new skill. Be careful of the neighborhood if you buy an income property. You can fix the house but not the neighborhood. Good tenants will save a lot of headaches. Check references. Be fair, and care about your tenants but treat it as a business.