Renting out a Chicago condo
November 1, 2009 12:55 PM Subscribe
My grandpa lives in Chicago and has decided to move into a retirement community (also in Chicago). We are not sure what to do with his condo. The mortgage is paid off, but the assessments come to about $550 a month with taxes being around $1000/yr. We would like to sell the condo at some point, but right now market is so bad that it might not be worth selling. We are considering renting it out, but have never had experience with renting. We believe we can rent it out for about $1,000 a month.
Has anyone had experiencing renting out their house/condo? We're not trying to make a lot of money in renting it out. We just want to wait out the bad market without my grandpa having to struggle to pay the assessments/taxes in addition to the rent for his new apartment.
What has your experience with renters been like? Did you use a property management company? How did you handle repairs? I've read horror stories about tenants not paying rent, refusing to leave and trashing the place. Does anyone have any suggestions in finding honest tenants? I'm interested in both good and bad stories. We want to go into this with our eyes open.
Has anyone had experiencing renting out their house/condo? We're not trying to make a lot of money in renting it out. We just want to wait out the bad market without my grandpa having to struggle to pay the assessments/taxes in addition to the rent for his new apartment.
What has your experience with renters been like? Did you use a property management company? How did you handle repairs? I've read horror stories about tenants not paying rent, refusing to leave and trashing the place. Does anyone have any suggestions in finding honest tenants? I'm interested in both good and bad stories. We want to go into this with our eyes open.
I've no experience as a landlord, but my gf has a 3 flat near Roscoe Village. She lives in one and rents out the other two; since she works full-time downtown, she's found it much easier to rent out her places using apartment rental brokers (I think she uses Apartment People, or Apartment Finders, or maybe both). She pays them the equivalent of one month's rent on the apartment to be rented, and they show the place and handle the credit/background check on the prospective tenant. They don't get paid unless the place gets rented.
She finds handymen or contractors to make repairs, or sometimes does them herself. This can take quite a bit of time and hassle, finding people to do the work, maybe taking off work, etc. (If you're handy, that will help your long-term landlording prospects a lot).
(Note that this is not a condo situation -- I'm not sure if you'll have to jump through other hoops to get board approval to rent it out, or if you need to say anything at all.)
She's had some tenants skip out, and some other issues. Nothing too terrible, and maybe the fact she's living on the premises keeps things from getting too out of hand, but based on what I've seen, I've decided the landlord thing is not for me.
If this is just a temporary thing, some type of property management set-up might be best, but the more hands-on someone else has to be, the less money there will be. And I've heard the rental market is really soft; there are a lot of unsold, brand-new condos available for rent in the city.
Hope that helps a bit.
posted by Bron at 4:12 PM on November 1, 2009
She finds handymen or contractors to make repairs, or sometimes does them herself. This can take quite a bit of time and hassle, finding people to do the work, maybe taking off work, etc. (If you're handy, that will help your long-term landlording prospects a lot).
(Note that this is not a condo situation -- I'm not sure if you'll have to jump through other hoops to get board approval to rent it out, or if you need to say anything at all.)
She's had some tenants skip out, and some other issues. Nothing too terrible, and maybe the fact she's living on the premises keeps things from getting too out of hand, but based on what I've seen, I've decided the landlord thing is not for me.
If this is just a temporary thing, some type of property management set-up might be best, but the more hands-on someone else has to be, the less money there will be. And I've heard the rental market is really soft; there are a lot of unsold, brand-new condos available for rent in the city.
Hope that helps a bit.
posted by Bron at 4:12 PM on November 1, 2009
If you rent it, rent it strictly through referrals by people you know and trust. Don't go through a realtor or put an ad in the paper.
posted by ZenMasterThis at 4:32 PM on November 1, 2009
posted by ZenMasterThis at 4:32 PM on November 1, 2009
If it was me, I'd definitely go the referral route, or at least the "let an agency do it" route. Since you are in it just to make up expenses, the (apparent) 1/12 loss you'd take seems mighty worth it.
posted by gjc at 5:13 PM on November 1, 2009
posted by gjc at 5:13 PM on November 1, 2009
When we moved to a bigger place (in Chicago), instead of selling my smaller place, I rented it out. It's a condo in a large building (roughly 150 units in the building). I used a broker to find the tenant (he ran a background check, including referrals from prior landlords and where I had been unable to find a tenant in six months, he found three viable tenants in one weekend). His fee was the first month's rent and it was worth it.
Because it's a large building, I don't need a management company--the condo building management handles things like installing the window A/Cs, plumbing mishaps, the radiators, lock-outs. I collect rent and if there's an issue with the unit that doesn't involve the commons (like a kitchen appliance or something), I'll deal with it.
We have also recently rented out my grandmother's house when she moved in with family. We used a management company for the whole process and for managing the property because we have no desire or ability to handle the property management (leaky faucets, broken banisters).
Please be aware that in Cook County, you will most likely be bound by the RLTO, which means (among other things) you will have to hold the security deposit segregated from your own funds, in an interest-bearing account. You can double-check to be certain with any number of legal aid/sliding scale agencies in the city.
posted by crush-onastick at 6:18 PM on November 1, 2009
Because it's a large building, I don't need a management company--the condo building management handles things like installing the window A/Cs, plumbing mishaps, the radiators, lock-outs. I collect rent and if there's an issue with the unit that doesn't involve the commons (like a kitchen appliance or something), I'll deal with it.
We have also recently rented out my grandmother's house when she moved in with family. We used a management company for the whole process and for managing the property because we have no desire or ability to handle the property management (leaky faucets, broken banisters).
Please be aware that in Cook County, you will most likely be bound by the RLTO, which means (among other things) you will have to hold the security deposit segregated from your own funds, in an interest-bearing account. You can double-check to be certain with any number of legal aid/sliding scale agencies in the city.
posted by crush-onastick at 6:18 PM on November 1, 2009
Oh, and my tenant is a dream. Sends rent payments in advance when she knows she'll be out of town. My former neighbors tell me that she's quiet as a mouse and friendly in the elevators.
posted by crush-onastick at 6:20 PM on November 1, 2009
posted by crush-onastick at 6:20 PM on November 1, 2009
I had to move out of state last year and decided to rent out my house. I am not handy and am generally hassle-averse, and I had many of the concerns you do about finding good tenants, but it has worked out ok -- better than I expected, actually. Something comes up every few months (dishwasher leaking, oven not working, etc.), and coordinating the repair is an annoying distraction for a few days, but for the most part, the rental property is not something I have to think about.
To answer a few of your questions:
* I decided not to use a property management company, only because I wanted to earn enough rental income to cover my mortgage payments, which wasn't possible with their fees. (I can't remember what the fees were, but they were substantial). It would have been nice to outsource all of the hassle, but I don't regret the decision.
* I can't fix anything myself, so I hire folks whenever something breaks. I've found a good plumber, electrician, and general contractor/handyman (Yelp is a good resource). I don't live in town, so I generally arrange for the service person to visit the house at a time when the tenant is home. I try to have problems addressed immediately, in the hopes that the tenants will, in return, be grateful, not mind waiting around to meet service people, and take good care of the house.
A couple of recommendations:
* Buy Nolo's Every Landlord's Legal Guide. It covers finding tenants, discrimination laws, crafting a lease, respecting tenant privacy, state-specific laws, etc., etc. It's a clearly-written anxiety-reducer. Aside from the internets, it's the only reference material I've used.
* Invest the time to create a good rental ad. Describe your condo in a friendly, personal, human voice. Mention nearby restaurants, coffee shops, public transportation, etc. Take good photos: clean up the place, find the time of day when the natural light in the unit is the best, turn off the on-camera flash, and think about composition. If you're not confident in your photography skills, spend some time googling on the subject and experimenting, or find a friend who is. I've found that good photos are really important for attracting tenants (our tenants mentioned them as a reason for contacting us). The average craigslist ad is just terrible; by doing the above, your ad will stand out and look awesome. See this post with striking before & after shots.
posted by medpt at 7:27 PM on November 1, 2009
To answer a few of your questions:
* I decided not to use a property management company, only because I wanted to earn enough rental income to cover my mortgage payments, which wasn't possible with their fees. (I can't remember what the fees were, but they were substantial). It would have been nice to outsource all of the hassle, but I don't regret the decision.
* I can't fix anything myself, so I hire folks whenever something breaks. I've found a good plumber, electrician, and general contractor/handyman (Yelp is a good resource). I don't live in town, so I generally arrange for the service person to visit the house at a time when the tenant is home. I try to have problems addressed immediately, in the hopes that the tenants will, in return, be grateful, not mind waiting around to meet service people, and take good care of the house.
A couple of recommendations:
* Buy Nolo's Every Landlord's Legal Guide. It covers finding tenants, discrimination laws, crafting a lease, respecting tenant privacy, state-specific laws, etc., etc. It's a clearly-written anxiety-reducer. Aside from the internets, it's the only reference material I've used.
* Invest the time to create a good rental ad. Describe your condo in a friendly, personal, human voice. Mention nearby restaurants, coffee shops, public transportation, etc. Take good photos: clean up the place, find the time of day when the natural light in the unit is the best, turn off the on-camera flash, and think about composition. If you're not confident in your photography skills, spend some time googling on the subject and experimenting, or find a friend who is. I've found that good photos are really important for attracting tenants (our tenants mentioned them as a reason for contacting us). The average craigslist ad is just terrible; by doing the above, your ad will stand out and look awesome. See this post with striking before & after shots.
posted by medpt at 7:27 PM on November 1, 2009
If the condo is on the low end, price-wise, it might be an ok time to sell. In some real estate markets (DC suburbs and Las Vegas are two I know of) the lower end stuff like middling condos, fixer-upper starter homes, etc, have been doing brisk business since the summer. (Some speculation that this is people hurrying to use the first-time-buyer tax credit before it expires, so it's not clear whether it's a sustainable boost.) At any rate, you could look at what comparable units are selling for, to see if maybe selling is an option after all. Websites like Zillow, Redfin, and Trulia (they may serve different areas?) draw their info from public records of sales, so look for recent sales of comparable units in his area.
posted by LobsterMitten at 8:45 PM on November 1, 2009
posted by LobsterMitten at 8:45 PM on November 1, 2009
Response by poster: Thank you! It is on the low end price-wise. We're considering putting it on the market and seeing what happens and if we don't get an offer, then renting it out until the summer.
Thanks everyone fory our responses!
posted by parakeetdog at 9:40 AM on November 2, 2009
Thanks everyone fory our responses!
posted by parakeetdog at 9:40 AM on November 2, 2009
This thread is closed to new comments.
posted by thomas j wise at 3:35 PM on November 1, 2009