Got PCS'd to El Paso Tx, can't get the house in Colorado sold, plenty of lookers, with two price reductions, and still no offer.

Somebody called and is interested in renting it though. My first thought is of aprehension though. Being a landlord from 700 miles doesn't exactly appeal to me, or the wife since i'll be in Afghanistan by the end of October.

Never been a landlord, so I don't even know where to start except the general random free, legal documents online for lease agreements, which would most likely all have to be adapted for Colorado's land lease laws.

So if somebody could give me a run down of what to look for and what to expect, especially in regards of the best way to get paid, I'd appriciate it.

Thanks,

FX41

 

I did it when I was PCS'd from Tucson to Willow Grove in Pennsylvania.

The key is to hire a property manager. You need someone right there to take care of the inevitable things that go wrong while you're away. In our case, we had to have the roof replaced, the water heater replaced and the gas line replaced between the house and the gas meter. The property manager took care of all the hiring of repair people to do it, and, of course, she knew who to call.

When renters moved out, she took care of getting the place ready for the next family and, she did the credit checks, lease stuff and handled the rent when it was paid. Fortunately, we never had to evict anyone, but she would have done that too.

I'm pretty sure you can expect to pay about 15% of the rent for this service. If you get a good property manager, they're worth their weight in gold.

They can also give you a pretty good idea on how much rent to ask for, so you're "priced right".

Now, I'm in the same town as the property we rent out, so I do it myself. It can become a full-time job, depending on how old the property is, and how handy and willing to do things your renters are.

- Jack

 

x2 on a good Property Manager


also ensure you have a good lease (require the tennant to have renters insurance, also list a clause that they cannot break the lease until the term is up without PCS orders, and if they create a nuisance in the neighborhood/police respond to the property etc you can evict them, no vehicle repairs on the proprty, all vehicles kept on the property must run and be registered etc)

 

Unless you're renting it to close and trusted family members, you'd be insane not to hire a management company and let them deal with it. For every person who has good luck renting out a single-family home, there are 25 for whom it turns out to be a total nightmare. I don't like those odds.....

 

X3 on the property manager.

I have two rental properties. The management company charges 10% and must call if a repair is over an amount specified by me. Anything under that amount just gets fixed and is taken from the rent.

When tax time comes all of the management fees, repairs, home depreciation, gas etc. are deductible. I usually spend about $80 for tax software that can guide me through all of that. Sometimes, especially the first year I put the property into service; I will end up with a negative income from the rental. So If I made $50K in salary from a job, then then I would deduct the loss from my salaried income.

If everything goes well, you just save your receipts and collect the money.

My homes rent almost instantly but I’m on pins and needles the whole time.

Note: Renters are not owners and will treat your property as such GAURENTEED!

For example: Rather then call a lock smith or whatever, they just kick the door in and patch the broken frame and don't tell a soul.

 

I have a friend that owns a real estate office and they do property management as part of their services. Check with a few real estate offices and maybe they can work out some kind of rent/least til sold deal and keep a positive cash flow for you.

 

Sweet thanks a lot Gents. I was figuring a good property managment company was in the cards, now I just need to find a decent reputable one that will not charge me an arm and a leg. Thanks.

 

Just remember property management group is just in it for the fee they give a Rats azz if your new tenant starts a grow-op in your house

 

Where in CO is the house?

 

I wouldn't hire a management company. All the ones I have seen do nothing but collect the 10% per month check. Have a buddy agree to do repairs for you and you just call him or have the tenant call him when something goes wrong.

Also put no sub leasing on your contract. No college students, if you're close to a college. FYI sometimes parents rent out a home for their children in college, and that can turn into a house full of students who do absolutely nothing to take care of the home.

Make sure you charge enough to cover monthly payments, taxes, insurance, and repair emergency fund per month.

If you have a clean house you might want to do no pets too. No smoking inside too.

 

Personally I would not want to rent out any property, there are to many potential problems. As the owner of the property you are responsible for the maintainance etc of it, that could well be a money pit if u don't have responsible renters. If the house gets trashed you will have to repair it all before re-renting it. Potentially u could also end up in a legal case with the occupants assuming u can find them. Also having a house as a rental is only going to work if u have renters. If its empty its not going to make any money, its gonna cost u more because of the expenses.

 

Gimme a break! My wife and I are renters that Landlords LOVE to have. I happily do little fixes here and there for their property just so they dont have the hassle of calling someone to come and fix it. Not everyone in the world is an a$$hole. So your guarantee is broken now.

 

Alright you win. I guarentee it.

 

Thanks for the reality check (insert sarcasm smilie here) dude! Well, that all sounds great in theory...but how about a guy in this situation that doesn't get the option?

FX41...I'm in the exact same boat. PCS'd little over a year ago when the market was in the tank. No dreams of selling and I refues to walk away and contribute to the current conditions like so many others.

I had about 5-6 months to do my homework on renting and property management. Long story short, for every two horror stories I heard about bad renters, there was a horror story about bad property managers; amonst them being managers telling owners the house was still empty all the while full of tennants and the company was pocketing the money, just as an example. Combined with the fact that I didn't want to pay the fee, but could not afford another $100 a month fee for the manager on top of my $300 in the hole on the rent!!

We ended up doing it all ourself and in the end, I just had to go with my gut. We found an agency to do credit/background checks and charged the applicants for that. That's the scary part, and you'll quickly find out why these people rent...because they'll never get approved to buy, that's why. We ended up renting to a young couple, both with jobs, one daughter, and one on the way. Pure gut instinct. 13 months later and so far so good. Typical full of excuses and the rent is late every month...BUT...they always keep in touch and they always pay the late fee, which is fine with us. We had a huge cushion built into the due date anyways. AND, after 13 months, they have not asked for a single thing for the house and the house looks great. I'm hoping our luck continues.

I feel your pain though as I do not enjoy being a landlord and will sell that house as soon as the market allows, but like you, no other option. I don't think property management is bad, you just gotta do some homework and find a reputable one that will take care of you and your house and not stick just anyone in there every 6 months.

As for the tax benefit...I have found none. I'm no tax expert, but best I can figure the incoming rent is considered income and at least for me, it outweighed any deductions on the home. It reduced my refund by a couple hundred bucks last year and was only a rental for 6-7 months of last tax season. Waiting to see what it does this year after a full year.

 

Wow! Time your repairs and visits right. Document everything and your rental becomes a tax shelter.

If you make any kind of decisions with the management company then you get the benefit of being "actively" verses passivly involved and that's an increased deduction. One of the biggest deductions that you miight miss is depreciation. You cannot deduct your mortgage payment though.