Decisions

[Corn Woman]

Been so busy trying to figure out what to do with the little house on my property that I don't remember how long it's been since I posted. Currently I have some estimates on fixing the place and trying to generate a small return on my investment plus I have the property to garden on. Got an estimate on a new roof, electrical, plumbing, sheet rock and windows. Glad I was sitting down, the contractor wants $30,000.00 I still would do the flooring, cabinets and paint so the total cost is still not in stone. But the rent income would pay for it eventually. DH wants to take down the house and build a garage that can store the boat and all things garden, but taking down the home has hidden costs. With the permit fees, demo and garage its $41,000.00 and still no total for the "abandonment" of service fees. (gas and power) At this point in time I'm at a loss as to what direction I should take. I'm free and clear on the property and don't owe a dime. Except annual taxes. I don't like the thought of going in debt to build a place to store stuff so renting seems like the better option but do I really want to be a landlord? Good news is as of today the massive stumps from the tree removal have been ground out and I can get the garden plowed. I was lucky enough to have a nice gentleman answer an ad I placed for manure and he delivered it for free.Funny how I get excited over well composted horse manure but that's the gardener in me. Now if I can just grow a money tree

 

[Denim Deb]

If you grow one, send me some seeds!

Not sure which is the way to go. That's a tough call.

 

[Marianne]

Yes, tough call. With the garage/storage, there will be more in taxes, too.

I'd be really nervous about spending that kind of money for rental property. That throws you back into making payments unless you got a lot of spare cash, eh? Then if it sits empty for a month, or 3 or whatever, you still have to make payments. I think I'd be getting some other estimates. Maybe just the roof from a roofing company, etc. Then you can be the contractor instead of paying someone else. I get pretty nervous when contractors are mentioned. They sub it out and sometimes the money gets pretty murky.

We were lucky, had good renters and didn't get stiffed until we were selling it to someone we knew. Guess she thought that meant she didn't have to pay rent anymore.

Good luck! and nice to hear from you again!

 

[baymule]

Rental property can be a nice kick in the bank account and a nice $$$ addition to retirement. If I were you, I would fix the house and rent it out. How much of the work could you do your self? I agree with @Marianne on acting as your own contractor. You are paying somebody to pay somebody to do the work, so pay the roofer, the plumber, the electrician yourself.

Besides, tax wise, you can write off all you spend on it against what you receive as rent. Rent it out for a couple hundred more than a note, if you have to borrow money on it. Put it in a special account to cover unrented months or repairs and pay the note, insurance and taxes from that account. After a few years, you should have a nice surplus in it-take a vacation!

Qualify your renters, it's easy to run a credit check online now. Find out what it costs and charge them an application fee. Consult with an attorney on landlord rights and what it takes to evict people. Find a rental agreement, maybe get the attorney to write you one, in your favor of course. Make it plain to your renter that you are paying a note on the house and that non payment is grounds for eviction. Charge a late $50 fee and give a $25 off if paid early.

Later on, if you decide to sell it, it has been all fixed up and will bring a decent price.

$41,000 to TEAR IT DOWN???? Gheesh. Get a match.

When I was a single mom, I couldn't afford my house note, so I rented my home and rented a shack for me and my kids. A credit report and references weeded out most of the prospective renters. I had a no smoking rule and did not allow roommates that were not on the lease. No cats, no waterbeds and no big dogs. Small dog was ok, but I had a pet deposit. I was real picky.

I say go for it. Tell your DH after the rent pays off the improvement note, then the rent can go toward building him a garage. Then you both win.

 

[k15n1]

The local fire department will often use a bad house as a training opportunity. Usually it's minimal hassle for the land owner.

 

[Britesea]

Sometimes it pays to take less money if you have a jewel of a renter. I got real lucky renting out the house that used to be mom's. The girlfriend that used to act as a sort of free caregiver for her needed a place that would allow her to keep her two (well trained) Rottweilers. She and I did the repairs together, and I let her choose colors and floor coverings to suit her taste. As a thank you for helping with my mom for so many years I only charge her about half the rate I could get in rent. I get less money, but on the other hand she takes such good care of the house that after 4 years with 2 dogs, the cream colored carpet she wanted is still immaculate, and she has done a lot of landscaping on her own dollar.

 

[Denim Deb]

That's the kind of renter to have!

 

[Marianne]

No kidding. My sis got burned as a renter years ago. She asked if she could do some landscaping, owners agreed. She spent hours and $$ to make a gorgeous yard. Then the owners raised her rent saying that the place was worth more now. People like that should be thumped on the head.
The rental agreement is a big deal. We did have one awful renter. Single guy, quiet..for 2 months. Then his old girlfriend and three little kids moved in and all hell broke loose. The house was a small, 2 bdrm. We should have told him that was a deal breaker, but we didn't and they moved when the lease was up at 6 months. Whew. Funny, I hadn't thought of that in years.

 

[Britesea]

I have heard nightmares. One friend of mine told me his parents had a guy live in their rental for 3 months and then he left in the night... leaving behind something to the tune of $30 THOUSAND in damages...

 

[Denim Deb]

My brother had to have renters evicted, and I don't know how much damage they did.