Anyone have/had rental properties?

[Intercooler]

I know some of the downsides to renting a home out. On the other side of the coin must be some good things as well.

We may be heading that direction and wanted to gather information.

[rw]

My mom and stepdad own 7, they are ok if you get good tennants which is increasingly hard to do. To me, they are not worth the hassle... i used to do a lot of the maintenance and repairs, that cured me of ever wanting to deal with renters of my own.

[harrygunner]

It can be hard, especially in 'left leaning' states. I have a friend who is always crying about problems renting property in California. Her current goal is to sell and get out of it. Tenants and rental agents can equal Hell.

I would only do it in states with laws that actually support capitalism.

[Intercooler]

I fear that part of it! The housing market has now started the Winter slump (although it wasn't great before) and we are tired of paying for an empty house, eating electric, water, etc...

[harrygunner]

Do you know anyone you trust looking for a house to rent?

Include tax consequences in your decision. Right now capital gains are deferred since you bought another house. Renting the old one affects that. Plus, you either keep renting the Maryland house; move back in temporarily to reestablish it as a home, not rental property or take the capital gains hit.
   
Recalling a few of my friend's lamentations:
   
- Have a handyman on call you trust. You'll be called when something stops working. NEVER let the tenant make repairs.
- Include statements to the effect no verbal, non-written agreements hold force.  Apparently some con artists will refuse to vacate for non-payment declaring they were given verbal permission to stay. Even then, you will pay court costs while the dead-beats have little to lose.
- Rental agents want their payment even when they don't properly screen applicants or stop by periodically to check properties.

Hopefully, you used to live in a small community where reputation still matters. This might lead to a good outcome.

There are books to read to get up to speed. You may like the process. There are those who flourish in it, liking to deal with tenants.

I own a business. Fortunately clients are intelligent professionals and checks don't bounce. It has been a growth  experience I've appreciated. Ask yourself honestly if it's something you want to do.

[Intercooler]

   It's for sure not the first choice, but properties have slowed down selling. The rental market on the other hand is pretty hot and losing money on an empty house for the last 6 months is getting old.

[DenStinett]

Ever see "Pacific Heights" ?   
http://www.imdb.com/title/tt0100318/

But yeah, we did for a few years
One GREAT Couple / Tenants
One OK
One not so good
Then we sold it
Best thing we ever did
It hurt though....It was the "Family" Home for over 70 years

[hammeredbean]

Your personal view and preconceptions will have a huge effect on whether you like it or not.  I for one don't have any now, never had more than one at a time.  But I was a realtor who worked with investors in a college town. 
#1.  Read books about it.

#2.  Do not be intimidated by it.  Use information to manage your risk.  This means, you will have lots of questions for your tax office, friend who is a Realtor, other people with rental properties....etc....Nay Sayers will point out all the negatives.....most of which might have been avoided with a clear and concise rental agreement. 

#3.  Do not get emotionally involved in a property.  Just calculate the numbers of costs including taxes, hoa fees, repairs, etc....and figure your cash flow.  It will work out if you do your due diligence!  I once had an aquaintance offer me the inside track on a deal where I could buy an RV park in a town 60 miles away.  He said they were having an influx of hundreds of employees to refurbish a power plant for several years.  I was able to get an individual to agree to loan me nearly 200k.  I was so excited I was about to really get some serious cash flow!  But as I would advise a client, I set in to do the homework.....after 3 weeks of resarching, driving, talking to the chamber of  commerce, and construction contractor at the power plant, AND the manager of the power plant (Alcoa I think it was), it just didn't ad up.  I also discovered that that little town had a gazillian sex offenders living there.  Saying no to that deal was the right thing to do but if I had not done the homework, I would have taken the advice of a friend and retired banker/investor who was saying....DO THIS!  I say all of this to say.....the process was still fun.  I enjoyed every minute of it even if I was let down in the end.

#4.  NEVER buy a property basing the decision on future appreciation!  Always Always make sure the numbers work out the day you sign the papers.  If it doesn't cash flow after property taxes and your payment and insurance, it doesn't matter what "current market values dictate".  There are always deals to be found.....the fun is the hunt!

#5.  Lease agreement....."When in doubt, spell it out".  Put EVERYTHING in writing...EVERYTHING so that your tenants will have a crystal clear understanding of what you do and do not allow.....therefore making it EASY to make them leave if the need arises.  Most peoples" bad experiences with rental property stem from not having a clear contract or not wanting to be prompt in dealing with issues.

#6.  You make your money when you BUY not when you sell.  The sales price of a property is sort of decided out of your hands....it is what the market says it is......BUT, the price you pay for it determines how wide of a margin that is! 

Sorry to be long winded.  As soon as my current situation changes I intend to begin investing in properties.  I helped others do it and read every book known to man a few years ago, but since 2009 we have been in a transitional time.  The investors I worked with taught me a lot about what to look for, be wary of, do, not do, etc......they all loved buying the properties.
Investing in real estate is an awesome thing to do, but you either love it or hate it....I love it.  It is easy for me to get on my soap box!   Real Estate investments  are tangible,  able to be insured, within your control to change, and generally (not always) appreciates over time.  If it burns to the ground, your insurance pays you for it.  If the market changes, you can adapt.  If a person's stock market portfolio goes to crap....they have nothing. 

Please accept my apologies for writing a friggin' book.  I had a full cup of fresh ground coffee and the urge to talk about real estate!  Good luck.  I really hope this helps you in your decision. 

[Intercooler]

  Thanks for the advice! We got notice Friday about a pending deal. Hopefully we sign the contract tomorrow and are done with it in a month. I have also been working on the back-up plan if it falls through to rent it out. I'm not as skeptical anymore and have made some good contacts. Actually today I made another great one for property management.

[ninja]

Small town is good,  word of mouth on finding a renter.   Price low to attract long termers and lower rent pays in cash only.  Never raise rent on annual contract renewals.   

[SagSlim59]

Our family has been in involved in rentals for years
good advice already given, I would focus on background checks and a good property management firm are great tools for moving forward.  The typical management fee here in Michigan is 10%.
One other idea, if you have a good hospital system near by, contact physician recruiting.  Residents that are doing rotation can be great tenant's.   Good luck