Advice for renting out your home?
April 1, 2015 6:56 AM   Subscribe

We're considering relocating across the country and renting out our current primary residence. We don't have experience with this, so if you've done something like this, what advice can you offer?

Some questions we have include:
  • whether it's worth it to hire a property management company, and if so, how do we evaluate the various options
  • how to handle routine maintenance like yardwork and how much "control" to exercise for things that we care about like permanent plants and garden beds
  • how to manage communication and maintenance remotely
  • how to interview potential renters
If you've rented out your home, let us know what we should be considering or arranging.
posted by odinsdream to Home & Garden (11 answers total) 11 users marked this as a favorite
We lost our house because of tenants from hell, and being too far away and unable to spend weeks or months there in person getting them out.

You have to hire someone on the ground, and they have to not be an idiot. I really don't know what conversations went on between ours and my husband, but I guess the guy only expected to have to deal with new leases and then do nothing, and that worked fine when we had a good tenant and then he disappeared when things got shitty.

Pay a little more for property management that will handle basic maintenance requests, do due diligence on prospective tenants, perform the occasional drive-by, make sure that repairs get done to requirements, hire decent make-ready crew between tenants etc.

In Texas, where I rented for many years, lawncare was generally on the tenant. In California I find that sometimes a "gardener" (lawn service) is included in the rent, and that's what we're doing right now and I think it makes everyone happiest. Everything gets done to the landlords specifications, he can just add on seasonal tasks (like tree trimming) to their to-do list, we're not jacking with the landscaping.

Background check with extreme prejudice. Out here, competition is stiff enough that we provided a resume-like cover letter with our applications, giving some more information about us and our earning potential and about our dogs' routines and habits.

Make sure you will never be in a financial situation where you can't afford to have the house sit empty - for months, if necessary - until you find truly suitable applicants. Honestly, if there's still a mortgage on the house and you're not financially prepared for the place to sit empty for at least 6 months without causing a hardship, you should probably sell instead.
posted by Lyn Never at 7:16 AM on April 1, 2015 [4 favorites]

I think you'll need to hire a management company if you're really going to be on the other side of the country as opposed to a couple of hours away. Speaking as a renter, there are way too many issues that pop up for you to be flying back and forth to deal with. Among other things, depending on the amount of turnover, there's the potential of having to fly out every year to show the house to prospective tenants and sign a lease (and presumably paying for a hotel/burning your vacation time during that period).

In terms of landscape, I've lived two types of places. In one, taking care of the yard was written into the lease as the tenants responsibility. You can probably imagine how well that went with a group of students...we made some effort, but ultimately we just were never going to care as much about how the yard looked as an owner, and during finals things got pretty overgrown. Obviously you could luck out and rent to someone who just adores gardening as a hobby, but I wouldn't count on this. Other places I've lived, the landlord has paid for whatever yard work/snow shoveling/outdoor maintenance needed to happen. I think it generally ended up with things both looking much nicer and with way less landlord-tenant tension over the appearance of the yard. I think this is especially true if you have substantial landscape that you actually care about like gardening beds -- you can't really expect a tentant to keep these in the shape you would want them, unless you're somehow offering a substantial drop in rent to compensate for their labor (like in some apartment buildings where there's a live-in maintenance guy who gets a break on rent).
posted by rainbowbrite at 7:17 AM on April 1, 2015 [2 favorites]

Unless you have friends of family that can handle it, cross-country means a property-management company is your best option. Who will fix things when you're gone? Who will inform you that your tenants stripped the house of all mechanicals, appliances, and wiring or are using it as a growhouse or parking in the yard? A property-management company stinks, and they take a lot of your money, but it's the least-bad option when you live across country. They exist only to address each of the bulleted concerns you've listed. Your next question should be which company is best for you.
posted by resurrexit at 7:17 AM on April 1, 2015 [1 favorite]

whether it's worth it to hire a property management company

It's very worth it. The things they'll do are hard to coordinate from another time zone: hiring plumbers in an emergency; finding your second tenants, long after you've settled in to your new city; visiting the property to see that it's still in good shape; etc.

As for how to find good ones, here's what I did:
  • Do you have friends who rent? Ask them who does their management. This can be a great way to find out who not to hire.
  • If you know someone who lives in a condo, then there are probably owners in the building renting out their units. If you can find out who they are (by asking the HOA board), ask them for recommendations. If your neighbourhood has an HOA, maybe you can do something similar there.
  • Make sure they'll do regular inspections of the property, to make sure everything's OK.
  • Ask the management company for references. And ask them questions like: what's caused you to evict tenants in the past, what do you look for in a tenant, what's caused your past clients to fire you.

posted by Banknote of the year at 7:24 AM on April 1, 2015 [2 favorites]

My advice would be to first, plan on returning once every 6 months to do an interior and exterior inspection. Second, get a regular gardener on board right now, someone you will pay monthly to maintain the exterior grounds on a weekly or bi-monthly basis. Third, it is impossible to handle a rental remotely without a great handyman who can be on call to check on any little thing that comes up. If you can't identify such a person, then work with a property management company that provides these kinds of services. Fourth, identify someone you will pay on an hourly basis to check on things for you, like the shape of the yard, whose cars are parked in the driveway, maybe to interview prospective tenants if you have turnover, etc. This is the person who can check to make sure the gardener is doing a decent job with your garden beds.

As far as renters are concerned, it is largely instinctual. Who will be the best fit for your property? Get their applications and run the reference checks. If their references are good and they say things like, "They'll leave your property in better shape than when you rented it," this candidate is likely a good bet.

We manage three houses we are unwilling to part with remotely and this is how we do it. That said, we keep a small apartment above one of the houses that my partner uses when he visits. At least once a year he goes and makes his presence felt, both with the tenants, the help, and the neighbors to let everyone know he cares and loves the properties and to touch base. He will even do the "handy" things when he's there, and inspect things no one else thinks to look at, like whether the trees need trimming.

We have never used a property management company because we find the above system works quite well for us. That said, it is something we have developed out of necessity over the last few years. Plus my partner has the freedom to get involved just enough to keep things running smoothly.

If you can't or don't want to do at least most of the things above, then yes, get a property management company. Hopefully someone else will address the ins and outs of working with a property management company.
posted by zagyzebra at 7:28 AM on April 1, 2015

I (UK) have had my house rented out unfurnished since 2001. I had moved far away and my agent takes care of all issues and does a 6-monthly inspection, I pay him 10% of the rent. My experience has been exemplary. Clearly the choice of agent is key, I opted for one who was recommended by someone with many properties in the area and whose opinion I valued.
posted by epo at 7:54 AM on April 1, 2015

How to handle routine maintenance like yardwork and how much "control" to exercise for things that we care about like permanent plants and garden beds

The only way to handle this is to hire people to take care of them. You cannot expect tenants to treat the house like it's "your" house. Once you sign a lease, you have to accept the fact that it's their home to live in.

My parents are currently renting out two houses: one five minutes away and one across the country. The one across the country is slowly taking to pieces (it's been 7 years) and the only way they've been able make it work has been by detaching all sentimentality from it and flying out once a year to do a thirough inspection. It's a giant pain and they hate it, but they are stuck with it for various reasons. Unless you're similarly stuck, I wouldn't bother.
posted by snickerdoodle at 7:58 AM on April 1, 2015 [1 favorite]

I'll add my recommendation for a property manager setup. I'm not even across the country from my place, but I do work a job where I'm far enough away that I can't drop everything and deal with issues that come up with the property.

I have a condo, so I can't speak to the yard work stuff, but they take care of regular maintenance also. For me that's less of a headache than the finding of renters, but still an important service. My property managers have people with skills on staff for basic repairs and better sources of services like cleaners and electricians/plumbing (because they are local).

I didn't have experience finding and vetting renters and I had no desire to wade into that if I didn't have to. My property manager deals as the front for my tenants - they have the rental agreement with them and deal with all of the finding and vetting of renters (including credit checks) as well as the preparation of my place for a new tenant. I get the rent less their fees (10% of the rent or a minimum charge of $99 per month) and any repairs or maintenance issues that came up during the month. I am very happy with them and it is worth the money I spend.

I read my agreement with the property manager carefully and made sure there were easy out if needed. If this agreement ends and I couldn't find a new property manager, I would probably sell my place.
posted by Cyrie at 8:13 AM on April 1, 2015 [1 favorite]

We rent out our house and it's only 10 minutes away. I can't imagine how you would rent out long distance WITHOUT hiring a property management company, because unless you're going to fly out there to evaluate a light that stopped working (might be a bad switch which is like 10 minutes of work, might be that they're idiots that don't know how to change a bulb... might be a roof leaking and causing the light to short out) you're going to need to have someone to do that for you, and who will really look closely at problems to make sure they're not big problems. And you're especially going to need to be able to get someone to look at problems quickly (e.g. broken furnace, no hot water, leaks, etc.)
posted by rabbitrabbit at 8:41 AM on April 1, 2015 [3 favorites]

I rent out my house remotely - literally across county OR to NH - and I agree with zagyzebra. I do not have a property management company, and in the four years I have rented my house, I have had a pretty easy experience without one.

I do travel to the house when I need to get new tenants (once so far), but my house is in a very desirable neighborhood in Portland so I had excellent tenants to choose from. After the preliminary applications, background checks, and reference calls (always make those calls!), I clearly and specifically told my tenants what it meant that I was a remote landlord. The biggest thing that I laid out was that they would absolutely have to be present at the house for service calls or maintenance (as I couldn't just stop by to open the door). I always try to rent to people with a dog (they tend to stay longer in place since it's a pain to rent with pets) and sell it as "for your own safety and the safety of your dog, you need to be present". When something is needed at the house, my tenants email me, I contact my preferred plumber/electrician/ handyman, and they work directly with the tenants on scheduling. I usually pay for the services directly, but the tenants have an understanding that in an emergency, I will reimburse them for emergency services. I'm not sure, but I thinking knowing that they themselves have to be involved in the maintenance of things has cut down on nuisance 'fix it' calls.

I pay for yard service to make sure the lawn is mowed and trees/plantings are always in good shape. I rent out here and I hate when I have to take care of the yard. I have a friend in Portland that I pay if something is needed that I can't do, and schedule the handyman to come out semi-annually to fix up the little things on the list.

Having good tenants is key though - do your legwork up front. I also use the lease forms that are provided by the rental association and that are 'landlord friendly', in case anything serious should come up.
posted by TNOTGILL at 9:53 AM on April 1, 2015

I did this when I was a military wife and moved from Kansas to the West Coast.

I hired the realtor who had sold me the house to manage it as rental property. Technically, our contract indicated she got some portion of the rent as compensation. In reality, she rented it to someone who wanted the moon for next to no money and the realtor reduced the rent for this tenant by removing her own fee, basically. So I got what I was due (and needed to cover the mortgage payment), the tenant got a bargain, and the realtor was in it for the fee she got when she sold the house a few years later.

However, I expected to sell from the get go. I had not been in the house very long, so I would have lost money selling it and I couldn't afford the financial hit at the time. I did not expect to return. So I was renting the house out specifically to wait for 1) the market to improve, because it had kind of tanked and 2) equity to accrue so I could afford to sell the house.

My house payments were low. I made like $20/month "profit" while renting. I set that aside to help cover repairs and incidentals. We had to replace a water heater at some point.

Also, do not expect your tenants to appreciate your taste or whatever. The more generic, the better. My tenant hated the wallpaper I had put in the kitchen and dining room. She wanted to remove it and paint. I gave my permission and she painted it all white. She made it look like a non-descript, cheap-assed apartment. I thought it was horrible because there were dark real wood kitchen cabinets and some of the appliances were black. She felt it really brightened the place up. I thought she had crappy taste. She no doubt believed the same thing about me.

So you need to understand that if you rent this out, it is no longer "your" house in the same sense it was when you lived there. You need to get over your emotional attachment to it being your home. It isn't anymore. You have got to wrap your head around it being investment property. You need to change how you think about it and how you talk about it. It is real estate that you own with a goal of making money, if not in the here and now than somewhere down the line. And you need to not be overly attached to the landscaping you lovingly installed when you lived there and loved gardening or whatever. It's just real estate once someone else moves in. And you need to treat renting it out as a business transaction.

If you can't readjust mentally in that regard, you might be better off just selling before you move. People who let a lot of emotional attachment cloud their judgment tend to make incredibly poor financial and business decisions. Real estate is a high stakes game. You can lose your shirt if you make those kinds of mistakes (you can even lose your shirt if you make no mistakes, because of vagaries of the market and what not -- but you are at dramatically increased risk of losing your shirt if you let emotion cloud your judgment).

Best of luck.
posted by Michele in California at 2:45 PM on April 1, 2015

« Older Which phone can I buy to pair with a cell phone at...   |   Help me find new music with really good lyrics! Newer »
This thread is closed to new comments.