Managing a Rental Property for my Dad
March 26, 2019 4:47 PM Subscribe
Hi! Do you manage a rental property? I need some help developing a plan that will work.
My Dad is heading East to retire and is leaving his house in San Diego for me to manage for him. We have maybe a month to prepare. He's already done all the serious prep work getting the house ready. I'm happy about it and know it's doable, but I have some questions and concerns.
The house is in great condition. It's remodeled and up to date. The yard is 90% zero maint xeriscape with a grassy area for kids. I know Murphy's Law, but this place is very serviceable. It is not far and I can handle maint and repair contractors.
My concerns are:
1. It is and has to remain furnished. I don't know if that matters.
2. It's in a nice residential neighborhood. So... long term rental/lease or vacay rental?
3. Do I need bookers like Air BnB or Evolve?
4. Do I need a management company to deal with tenants?
How can I do the best job? Many thanks and wish us luck!
My Dad is heading East to retire and is leaving his house in San Diego for me to manage for him. We have maybe a month to prepare. He's already done all the serious prep work getting the house ready. I'm happy about it and know it's doable, but I have some questions and concerns.
The house is in great condition. It's remodeled and up to date. The yard is 90% zero maint xeriscape with a grassy area for kids. I know Murphy's Law, but this place is very serviceable. It is not far and I can handle maint and repair contractors.
My concerns are:
1. It is and has to remain furnished. I don't know if that matters.
2. It's in a nice residential neighborhood. So... long term rental/lease or vacay rental?
3. Do I need bookers like Air BnB or Evolve?
4. Do I need a management company to deal with tenants?
How can I do the best job? Many thanks and wish us luck!
IMHO you'll want to consider Airbnb versus a normal rental. Airbnbing is a lot of work - you have to manage the site and respond quickly. There are a lot of things you need to do to be high visibility on airbnb (for example, willingness to have under 25 year old people as guests). There will be damage. But you'll make more money. But what are the tax implications of this?
Is the neighborhood desirable for tourists? Is it near a bus line? Is it close to attractions? If not, you'll have a harder time. Look on airbnb and see how busy it is in your neighborhood and how much people are renting for.
Renting the house to a family that wants to live in the neighborhood won't make as much money but it is more likely that the house will remain in decent shape. There will be less day-to-day work. Your dad, as owner, is going to need to pay non resident taxes on the property though. Few people want a furnished rental.
posted by k8t at 5:24 PM on March 26, 2019 [1 favorite]
Is the neighborhood desirable for tourists? Is it near a bus line? Is it close to attractions? If not, you'll have a harder time. Look on airbnb and see how busy it is in your neighborhood and how much people are renting for.
Renting the house to a family that wants to live in the neighborhood won't make as much money but it is more likely that the house will remain in decent shape. There will be less day-to-day work. Your dad, as owner, is going to need to pay non resident taxes on the property though. Few people want a furnished rental.
posted by k8t at 5:24 PM on March 26, 2019 [1 favorite]
Please don't Air BnB. It removes potential inventory from the rental market and drives rental prices up, as well as decreasing local employment opportunities, especially for low-waged hotel staff. There are also plenty of horror stories about squatters, your airbnb guests subletting, and damages airbnb refuses to cover.
It's also illegal in a number of places, and San Diego is beginning to restrict and regulate to deal with the 11,000 residences removed from the rental market by AirBnB.
posted by DarlingBri at 7:09 PM on March 26, 2019 [5 favorites]
It's also illegal in a number of places, and San Diego is beginning to restrict and regulate to deal with the 11,000 residences removed from the rental market by AirBnB.
posted by DarlingBri at 7:09 PM on March 26, 2019 [5 favorites]
You could market it as a corporate or executive rental with a short lease for people working temporarily in the area. You would be likelier to get older/busy tenants with their employers footing the bill, like people working in construction management. In addition to furnishing you would need to maintain utilities and internet/TV service and include that cost in the rent, but it would be lower-maintenance overall than AirBnb. The kid area could be a plus if they have family that wants to visit.
(Source: my partner is working in a fast-growing neighborhood outside a medium-large midwest city and he is having trouble finding exactly this.)
Good luck!
posted by a moisturizing whip at 7:11 PM on March 26, 2019 [2 favorites]
(Source: my partner is working in a fast-growing neighborhood outside a medium-large midwest city and he is having trouble finding exactly this.)
Good luck!
posted by a moisturizing whip at 7:11 PM on March 26, 2019 [2 favorites]
Best answer: I had a 2 family home for 20 years.
Be really critical of the furnishings, they may not add value if they are outdated. Pay to have the place professionally cleaned - carpets, curtains. Store stuff in a bedroom or section of the garage if needed. Take pictures of the whole place for comparison in case of damage. Home owners' insurance should be maintained, esp. liability. I had tenants use the grill too close to the house and melt the vinyl siding; could have been worse.
Get a work reference and a prior landlord reference and check them thoroughly; do not skip this. Tell tenants the rent must be on time, do not be easygoing about this. Ask about pets, amplified instruments and other possible problems. Pets usually cause damage, many people have pets. Choosing good tenants is critical.
Go to the library for books about being a landlord. Search for sample tenant-landlord agreements/ leases. There must be a tenant rights organization; look at their info to understand local laws.
If you can get corporate tenants that would be excellent.
posted by theora55 at 8:03 PM on March 26, 2019 [3 favorites]
Be really critical of the furnishings, they may not add value if they are outdated. Pay to have the place professionally cleaned - carpets, curtains. Store stuff in a bedroom or section of the garage if needed. Take pictures of the whole place for comparison in case of damage. Home owners' insurance should be maintained, esp. liability. I had tenants use the grill too close to the house and melt the vinyl siding; could have been worse.
Get a work reference and a prior landlord reference and check them thoroughly; do not skip this. Tell tenants the rent must be on time, do not be easygoing about this. Ask about pets, amplified instruments and other possible problems. Pets usually cause damage, many people have pets. Choosing good tenants is critical.
Go to the library for books about being a landlord. Search for sample tenant-landlord agreements/ leases. There must be a tenant rights organization; look at their info to understand local laws.
If you can get corporate tenants that would be excellent.
posted by theora55 at 8:03 PM on March 26, 2019 [3 favorites]
1. It is and has to remain furnished.
Out of interest, why does it have to remain furnished if your father isn't coming back? I think furnished is an extra hassle because inevitably, stuff gets wrecked and needs replaced between tenants. It's necessary for short-term lets if you want to go that route, but a minus for anybody who wants to live somewhere long term and use their own furniture (and personally those are the tenants I'd be aiming for).
posted by stillnocturnal at 5:07 AM on March 27, 2019 [1 favorite]
Out of interest, why does it have to remain furnished if your father isn't coming back? I think furnished is an extra hassle because inevitably, stuff gets wrecked and needs replaced between tenants. It's necessary for short-term lets if you want to go that route, but a minus for anybody who wants to live somewhere long term and use their own furniture (and personally those are the tenants I'd be aiming for).
posted by stillnocturnal at 5:07 AM on March 27, 2019 [1 favorite]
Property manager, 100%. Especially in California, there's a lot of art and science to being an effective and legally-compliant landlord. It will cut the net income of your activities, but, to be honest, one single family home is a terrible income investment in any event, so that shouldn't be a concern.
posted by MattD at 7:43 AM on March 27, 2019 [1 favorite]
posted by MattD at 7:43 AM on March 27, 2019 [1 favorite]
Second the property manager. I managed apartments for my parents for a while and soon discovered I was not hard/heartless enough to deal with non- or slow-paying tenants. If you are "soft," they will pay you last if at all. It was worth it to hire a faceless company to be firmer than I was able to be.
posted by cross_impact at 9:35 AM on March 27, 2019 [1 favorite]
posted by cross_impact at 9:35 AM on March 27, 2019 [1 favorite]
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The least work would be to find a family who pays rent on time without issue and signs a 1 year / 9 month lease -- maybe they're new to the area for a job and need a place to stay while they look for a place to buy, or are here for one academic year, etc. How's your dad's house's school district?
I know I've used in all kinds of socioeconomically-indicative language here, but that's the reality: people with steady incomes will find it easier to pay. With easy tenants, you do not need a management company -- list it on whatever local listings are popular.
With AirBnB, you're signing up for a hobby, or at best, contracting out that hobby. Is your dad's place good for vacationers? Do you like making beds? Will the neighbors be happy with it? Is it permitted under HOA rules? [these questions are from my living in a co-op where a member is currently violating our short term rental policy; yes, the neighbors will know]
posted by batter_my_heart at 5:20 PM on March 26, 2019 [1 favorite]