Share Your Experience Being a Landlord

[tommyboy444]

I am trying to convince my parents to rent their current house in order to hold on to the low interest rate mortgage and buy a new home inside the loop, most likely in the east end.

Any experiences and advice you have renting houses would be greatly appreciated.

[TJones]

I am trying to convince my parents to rent their current house in order to hold on to the low interest rate mortgage and buy a new home inside the loop, most likely in the east end.

Any experiences and advice you have renting houses would be greatly appreciated.

Pay the money to have a credit application ran. There are horror stories out there. Try renting the movie Pacific Heights, and you'll see.

[houstonmacbro]

is that a recent movie?

[TJones]

is that a recent movie?

Matthew Modine, Meg Ryan, and Michael Keaton, circa 1990. Should be at Blockbuster.

[TheNiche]

I am trying to convince my parents to rent their current house in order to hold on to the low interest rate mortgage and buy a new home inside the loop, most likely in the east end.

Any experiences and advice you have renting houses would be greatly appreciated.

What's the quality of their current house? Location? How I would deal with tenants would have a lot to do with how much money they make. Sometimes third-party management compenies would come in handy.

Btw, TJones offers sage advice. Heed it.

[tommyboy444]

What's the quality of their current house? Location? How I would deal with tenants would have a lot to do with how much money they make. Sometimes third-party management compenies would come in handy.

Btw, TJones offers sage advice. Heed it.

Its a 1950's ranch style home in an older part of clear lake that is in fair quality. It actually used to be a rental home before my parents bought it. The most notable upgrade is the laminate wood floors in the living and dining room. It is a good location for a young family. I think the rising interest rates will bring in more renters, but do not have much experience with all that.

[musicman]

I am trying to convince my parents to rent their current house in order to hold on to the low interest rate mortgage and buy a new home inside the loop, most likely in the east end.

Any experiences and advice you have renting houses would be greatly appreciated.

just get good renters....YOU will always take better care of your house than they will. at my parents old house, they lived there 7 yrs and never had plumbing problems...they moved in and my dad said the toilet clogged several times. what happened? they threw diapers down the drain!!

[nmainguy]

I am trying to convince my parents to rent their current house in order to hold on to the low interest rate mortgage and buy a new home inside the loop, most likely in the east end.

Any experiences and advice you have renting houses would be greatly appreciated.

It depends. If you are the landlord of a single property, I recommend a credit check and references from past landlords. If it's multiple properties, I recommend a management firm that will at the least perform the above.

I've been in both positions and am currently in the latter so I speak from an experience that has been somewhat positive and successful.

In either case a background check is essential and a money saver in the long-run.

[LarryDallas]

Do not hire a management company; IMHO.

Why? Because they follow a set protocol and do not take real world factors into consideration. They make decisions based only on what a person is like on paper. Someone can have immaculate credit, be crime history free, etc....but be a total jerk, a complainer, or just messy.

When you rent it out interview the potential residents and use your 6th sense about them. Do use a background and credit check but also use your common sense. Do they look like people who will take care of your house? Do they take care of themselves? Do they sit up straight and look you in the eye when they speak to you? Are they respectful towards you?

DO hire a lawyer to draft a lease and make sure you and your renter agree on who pays for what, who cuts the grass, etc...

You will find a good renter if you do it yourself instead of leaving it to a third party who hires an employee who is under pressure to turn leases so he/she gets better evaluations and more money. You have a much greater stake in who lives there than anyone else on earth does.

[mpbro]

People say that single moms make good tenants. I'd think that a clean house close to good schools would have a great tenant pool.

I have limited experience with lots of rental properties or problem tenants. However, I would say this: if your parents are planning on using proceeds from rent to finance another property, interruptions in cash flow are most unwelcome! In my opinion, vacancy is the most important issue. Find a tenant, keep them, and when they leave, have a disciplined strategy for finding a new one. Vacant for 4 months is not an option.

You might post this same question to a good Houston real estate forum.

Edited March 25, 2007 by mpbro

[Howard]

I am trying to convince my parents to rent their current house in order to hold on to the low interest rate mortgage and buy a new home inside the loop, most likely in the east end.

Any experiences and advice you have renting houses would be greatly appreciated.

From my experience... It sucked. I had to evict one and the staute for Florida was that they had to be 3 months behind before I could evict them. $250.00 court cost. VERY lucky to get the $3,000 owed to me. I was so mad I sold the house. The dumbest move ever because the Miami market went nuts or I could have held onto it and it would be near paid off.

2nd house I was forced to rent to keep from foreclosing after loosing my job. I was 4 hrs. away. I called for abour a week or two and found out through a neighbor that they moved out... NO NOTICE.

Real estate can be good but it is NOT easy.

Advice:

CREDIT CHECK

REFERENCES

JOB VERIFICATION

INTERVIEW

(None of which is fool proof)

I have never used a management company but I would look into it.

Even though I had bad experiences and am trying to rent out my current NEW home (realtor) I am and will do it again...

BEST OF LUCK!

[Native Montrosian]

They should talk to their insurance agent. Some companies, like Travelers, have a moratorium on Dwelling policies, which is the type of policy needed for a tenant occupied structure, even for current clients. Also, some companies are requiring a lead paint inspection & certification for anything built before 1960. Lastly, most policies exclude liability for mold. If mold is discovered somewhere and tenants decide they're feeling sick, liability or medical payments won't cover it. An attorney can advise on how a Hold Harmless agreement could address the contaminant liability situation, I'm sure.

[Vertigo58]

Any experiences and advice you have renting houses would be greatly appreciated.

Sounds easier than what one might think.

We rented my childhood home for a number of years and finally threw in the towel.

People seemed so polite and needy at first and as time went on rent late, excuses and worsened. Our old neighbors told us of wild parties, trashing the place. Out of revenge they would take everthing even what was bolted down, light bulbs too! Just like the grinch! then kindly sneak out at night when no one was awake (so they thought my uncle lived next door)hah! Best day was the day we sold it!

My mom helped rent some small apts across the street where we lived but this was over 25 years ago and renters were much more decent it seemed then, but we had some that out of revenge would pour cement in the toilet and or remove the doors and take away. Nice.

and oh yes, rent "Pacific Heights" saw when it came out and Michael Keaton was a mean Batman in this one.

Finally, you can do if your single but if married forget it you wont have time for a thing. Wife will kick you out and wouldnt blame her. Renting will wear you out. Stock up on Maalox and Tylenol.

[PapillionWyngs]

Well, my family has had tons of experience being landlords. Only thing I would advise is - DON'T.

My grandmother owned a house on Scanlock (behind Deady Jr. High off Broadway). When I was born in 1956, she moved in with my parents, and rented it out, fully furnished. There were always things to be repaired, always tenants sneaking out without paying, but the worst was after she had passed away and my Mom, Dad and I (Mom's other two sisters only wanted their portion of the rent) took care of everything. We rented to a very nice couple - said they owned their own business. Neighbors liked them, they kept up the yard - then one day, the house exploded. Seems these nice "tenants" owned a bar, and used a bedroom in the house to store their liquor. One of them forgot to turn off the iron, sat it on the ironing board - and - however many hours or minutes later - BOOM! House totalled.

About 30 years later, my Dad inherited about 6 rent houses - all over Houston, including one in Cut 'n Shoot - and they were nothing but heartaches. After he passed away, my Mom and I had to deal with them. We sold them all - she still carries a note on one.

I wouldn't do it - you couldn't pay me - and, honestly, I was involved as much if not more, than anyone. Sat in on the interviews, helped word the ads for the newspapers, cleaned every time a tenant moved out (which meant washing the walls, ceilings, light fixtures, all surfaces, furniture, wood floors, etc.) helped paint, mowed grass, the whole spiel. It isn't worth it. Especially in that part of Clear Lake. I just wouldn't do it. Just my two cents.

Edited March 27, 2007 by PapillionWyngs

[TAK]

once you've decided finding good renters is ABSOLUTELY important.

1. credit check - don't expect to find good credit, in most cases. if they had good credit, they'd buy, unless they have some other circumstance (moving again soon, no cash because they're young, etc.)

2. rental history check - don't take their word for it, look up the owner of the property and try to contact them, or you will end up talking to the applicant's cousin - i'm not making this up. last year i denied two people with good rental history - after finding the actual owner, as opposed to who the applicant listed as the landlord. EVEN if they bring you a "lease" - look up the property owner.

3. criminal history check (you do not want someone who was selling drugs, but plead down to misdemeanor, selling from your home - i'm not making this up.)

4. employment history check (same as rental history, basically. i'm not making this up, either.)

5. get a home warranty and find a good fix-it contractor. when something breaks down and you have a renter, you can't defer it. the AC goes out. the electricy goes out. the roof leaks. your parents may not want to get up at 3a just to go check the breaker box and flip the switch.

if the house is in good shape, and you have renters who check out, it's not bad. if you do not do the above, you will mostly get burned. even if you do the above, you might get burned. one of my real estate partners has had to evict twice in a year from one house - and we do all of the above (although we didnt get a warranty on a house we bought last year, which we're going to discuss in about an hour).

renters are renters for a reason, and it's not usually because they are financially sound. a few are, most are not. period.

having said all of that, i recommend landlording, and i do it.

[OldHouseLover]

Do not hire a management company; IMHO.

Why? Because they follow a set protocol and do not take real world factors into consideration. They make decisions based only on what a person is like on paper. Someone can have immaculate credit, be crime history free, etc....but be a total jerk, a complainer, or just messy.

When you rent it out interview the potential residents and use your 6th sense about them. Do use a background and credit check but also use your common sense. Do they look like people who will take care of your house? Do they take care of themselves? Do they sit up straight and look you in the eye when they speak to you? Are they respectful towards you?

DO hire a lawyer to draft a lease and make sure you and your renter agree on who pays for what, who cuts the grass, etc...

You will find a good renter if you do it yourself instead of leaving it to a third party who hires an employee who is under pressure to turn leases so he/she gets better evaluations and more money. You have a much greater stake in who lives there than anyone else on earth does.

Excellent advice. Been landlord 30+ yrs. DIY