Rent out my home while trying to sell????

brantOctober 9, 2009

I recently bought a new home. My other home is paid for and is currently off the market. I plan on putting it back on the market next spring. I have a renter that I could trust who wants to rent it. I don't want it to sit empty during the winter. They know it is going on the market in the spring and if it sell they will have to move. I have never rented out a home before so I would like advice. Thanks Debbie

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From a realtors point of view, dealing with tenants is a nightmare. Most of the time, they really don't want to move so they make showing the home difficult if not impossible. They rarely allow the showings, if by chance they do, the place is a mess. If you dont need to rent it, dont! It is VERY RARE to find a tenant that will actually put the house in showing condition.

    Bookmark   October 10, 2009 at 8:43AM
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Check the tax implications of renting it out before doing so.

    Bookmark   October 10, 2009 at 9:35AM
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"Check the tax implications of renting it out before doing so."

One of the big 'gotchas' is depreciation.

If you fail to actually take it, the IRS will compute the profit based n you having taken it anyway.

If the house is paid for you will have income from the rent, less any expenses you actually have.

You might consider renting short term and then having it vacant when you place it back on the market.

    Bookmark   October 10, 2009 at 10:32AM
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Why not keep it on the market until it sells, regardless if it is fall or winter?

I vote no for the renter. I am speaking as someone that previously was a landlord.

Most landlords say never to rent to family or friends(coworkers included) or family of friends or friends or family. Else you might lose that friend forever when they move out leaving urine stains from pets that they say they never had. Then they badmouth you to others saying you are charging them for something unreasonable. Folks will take sides.

If you decide to rent to this person anyway, make sure you have a written contract, security deposit and also do a credit check before agreeing to rent to this person, even if you trust them. If their credit is bad, don't do this. Also take pix of everything before they move in. Write up a list that describes the condition of everything(each appliance, carpet, cabinets, windows, doors, trim, faucets, lawn, driveway, etc) upon move in and have them sign it. This is a must.

Don't consider renting if they have pets, no matter how clean.

Don't allow pets to show up after the fact, or other folks that are staying there for months at a time. Some renters bring in 5 other people later and if there is no teeth in the rental contract, you can be stuck with a house full of people.

Realize it is very easy to find renters - but the trick is to pick the good renters that will pay and will not destroy the place or cause issues.

Rental history, background checks, employment verification, credit checks, and just plain talking to the prospective renter and their prior landlord will assist with weeding out the renters. tricky tennants have friends pose as prior landlords, and tricky tennants know the landlord tennant laws well - just enough to trick you.

You need to know the landlord tennant laws in your area.

Lastly, some potential buyers might think less of the home if it was used as a rental. And you likely will have to fix/clean/paint after the renter moves out.

Go to mrlandlord dot com to read everything about being a landlord. That site is used daily by landlords. I suggest you post the same question there. They will give you good info. To see the forum area of that site, click on the area that says something like Landlord Q and A. Landlords post there often. It is some very intersting reading and is a must read for anyone that considers being a landlord, even for a month.

    Bookmark   October 10, 2009 at 12:38PM
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Renting your property out is a legal mine field. In some states, it is a really nasty mine field. California comes to mind. If you are going to do it, it is best handled by a top notch and highly ethical professional single family dwelling property management company, who will no doubt earn their fee.

I know of one in the entire country, if it is still operating.

Spoken as a former landlord. One who turns down the all too frequent offers to rent his still owned vacant ex home.

    Bookmark   October 10, 2009 at 11:05PM
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Why are you waiting until spring to list it?

    Bookmark   October 11, 2009 at 1:00AM
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I'd thoroughly investigate this renter's history- why would that person be so eager to rent a place if they have to move out so soon. Moving is such a hassle, and it strikes me as kind of unusual that this person would have no problems with moving in and out in only a few months.

If you do go through it, make sure you get a month to month lease instead of year lease. Even if you sell the place, that person doesn't have to leave until their year-long lease is up. And, if you do sell it with the renter on a month to month lease, you still need to give them at least 30 days notice to leave.

    Bookmark   October 11, 2009 at 4:24AM
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" it strikes me as kind of unusual that this person would have no problems with moving in and out in only a few months."

Short term rentals usually get a premium over one year rentals.

    Bookmark   February 1, 2013 at 3:57PM
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I'm sure that short term is done...

    Bookmark   February 1, 2013 at 5:07PM
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