Moving Soon, Looking at renting current home (Texas)

[j&j]

My wife and I are moving soon and thinking of keeping our current home to rent while the market is soft for home sales, rent prices are strong now as obviously it's tougher for people to get or even want a mortgage right now...

Our mortgage would be around 900 all in (principal/interest, taxes, insurance). Rent prices are roughly 1200 a month for the home we have now, so ideally that difference should cover any repairs that come up throughout the year...



What I'm looking for is the basics on how to do this? Where do I find the correct rental contracts? How do I pull someone's credit and do a background check? I do have some common sense too so hopefully that can help.


Financially speaking we could afford to keep the new home and our current, although it wouldn't be ideal, but it wouldn't break us if the house went vacant for awhile...

 

[Sluggo]

You moving across town or out of town? No way would I be a long distance landlord.

I also consider $300 a month to be too low of a return, you can lose all of that and more that refurbing the house between tenants.

Just my 2 cents.

 

[drebo]

If you're out of town, hire a property management company to handle the details. You'll lose a bit of the rent, but it'll make your life considerably easier.

 

[Phoenix86]

If you're out of town, hire a property management company to handle the details. You'll lose a bit of the rent, but it'll make your life considerably easier.

This was my first thought.

 

[Uppsala9496]

You can also have any potential renters give you a copy of their credit report. This way you are not paying for it, they are.

 

[MrPickins]

If you're out of town, hire a property management company to handle the details. You'll lose a bit of the rent, but it'll make your life considerably easier.

Best advice you will get. :thumbsup:

 

[Jimzz]

You can also have any potential renters give you a copy of their credit report. This way you are not paying for it, they are.

Credit report is ok but don't let them bring it. I can scan and fake it easy and those that would do that are the ones you need to be worried about.

Buy it yourself and treat it as part of doing business.

 

[MetalMat]

Where in Texas?

 

[j&j]

We're just moving across town, 30 minutes away from where we are now.. DFW area, in Carrollton now.

 

[j&j]

You moving across town or out of town? No way would I be a long distance landlord.

I also consider $300 a month to be too low of a return, you can lose all of that and more that refurbing the house between tenants.

Just my 2 cents.

that's 3600/year give or take... 1200 is on the low end too. Anyway, it's a simple house, all electric, brand new HVAC inside/out. There aren't many big expenditures for a house like this, 1360 sq ft in North Texas, no basement. Things like carpet, some sheetrock, definitely paint.

Anything else I'm missing? Obviously I'd do an in person interview, credit and background check...

I'm really looking for where to begin? Are there standard contracts I could use, how would I pull their credit and or background check?

 

[Blackjack200]

http://www.amazon.com/Landlording-Ha...ds=landlording

There are no standard contracts. A lease agreement that covers every contingency will be impractical in length and probably overly intimidating to a prospective tenant. There is art and science to screening. I'm much better now than when I started, but not nearly good enough. Some people are probably good at it right off the bat, but not me, so I just try to learn from my mistakes and do better each time.

The book I linked to has lots of templates for leases, applications, notices, rent receipts, etc. and good advice for starting out.

Between vacancy, repairs, and all the other little shit you have to go through, you will probably not make much, if anything on this property, but if your goal is to avoid selling it for a little while and let the market firm up, you shouldn't lose too much either.

 

[Anonemous]

My wife and I are moving soon and thinking of keeping our current home to rent while the market is soft for home sales, rent prices are strong now as obviously it's tougher for people to get or even want a mortgage right now...

If you are not going to be local or have time to deal with tenants, get a management company. I don't know about TX but in CA you can ask for a nonrefundable application fee. It's usually around $30 to check credit (a lot of apartments do this).

 

[Dr. Detroit]

Don't forget to keep track of rental income & repairs for tax purposes -

 

[Sluggo]

that's 3600/year give or take... 1200 is on the low end too. Anyway, it's a simple house, all electric, brand new HVAC inside/out. There aren't many big expenditures for a house like this, 1360 sq ft in North Texas, no basement. Things like carpet, some sheetrock, definitely paint.

Anything else I'm missing? Obviously I'd do an in person interview, credit and background check...

I'm really looking for where to begin? Are there standard contracts I could use, how would I pull their credit and or background check?

Yeah, I was able to do the math.

I am speaking from the point of view of someone who has rental properties, and knowing what I know about tenants, I would not do it for that return.

If you hire a property management, they will want about 10%, so you are already down to $180 a month. There is also no guarantee they will look after your property, or insure that the tenants were properly vetted, like you would do yourself.

Your homeowners insurance will be higher since an owner occupied property policy is much different than a landlord policy, probably with a much higher deductible.

Personally if I had a rental property, I would also want, and I do, have a personal liability umbrella policy of $1,000,000 or more. Having that may also make all your other insurance slightly higher since you will have to raise all of your liability limits to the minimum the umbrella requires.

We won't even go into the horrible feeling of going into a house that was once your home, and seeing that people have totally trashed it.