There are people out there who are made to be landlords. They like the idea of having someone else pay the mortgage on a home or apartment building and enjoying the ability to build equity on the property without using their own money. Once the property is paid off, the monthly rent is income (offset by the cost of taxes, insurance, and keeping the property up).
I totally get why some people love the idea of getting into real estate and renting out property. I even get why many people who, upon moving, decide that they would rather rent out the old home than sell it.
I am not one of those people. I am getting ready to move across the country, and my husband and I have no desire to try to rent out the house. In fact, in the worst case scenario put forth by our real estate agent, we will have to pay $10,000 to unload our house.
But I'd rather do that than become a landlord. Here's why:
I Don't Want to Worry About Damage to the Property
We've taken good care of the house. When we were tenants, we took good care of the rentals we lived in. I expect, now that we are moving into a rental again, we will once again take good care of our living space. However, not everyone is as conscientious as we are. We have one (well-behaved) child and no pets. I've seen what others have done to rentals in the past. We wouldn't want to allow pets, and, while we could technically say no to someone with lots of rowdy kids, we'd feel bad.
The other issue is that of tenants who might not pay rent on time, or who might have a history of damaging apartments. It's true we can vet our tenants with credit checks, background checks, and reference checks. However, these things take time and money. And I don't want to mess with it. Properly vetting a tenant is more work than I want to do, and even then you still run the risk of having problems with the tenant.
Managing Long Distance Is Too Much Work
Another issue is that of management. I don't want to manage a property in Utah from Pennsylvania. From maintenance needs and repair issues to checking up on the tenants, doing so from 2,000 miles away just doesn't appeal to me. Yes, I could hire someone to manage the rental for me, but that requires that I go through a vetting process to find a suitable candidate, and I am not interested in doing so.
Plus, it's one thing to hire a manager or management company for an apartment building, or to help you with multiple properties. It's quite another to hire someone to manage a single home. None of it seems worth it.
Hopefully we'll be able to break even on our home sale, but even if we're not, it's worth it to me to avoid the hassle and inconvenience of being a landlord. It's just not my thing.
What about you? Would you consider becoming a landlord? If you are a landlord, what do you like about it?
My thinking is the opposite…..I know each has hassles, but I’m thinking I would rather rent out my place than go through the hassle of trying to sell.
I know it would be a stretch to carry 2 mortgages while our home is on the market, so that means we would put it on the market while living in it. The idea of people coming and going at a whim just drains me. Then having to keep the house “staged” because a pretty house sells.
But still, people are going to want to look in my closet and cupboards because that is their prerogative while buying….however invasive it may be.
Ideally, when we are ready to move when can put our house on the base availability list and get a military family to rent from us. Does that guarantee we won’t have problems….no? But typically they are trained to be responsible and there is a housing allowance so cover some or all of the rental costs.
In the past, contacting military supervisors was appropriate for an unruly tenant and was enough of a deterrent to keep people in line. Landlords near bases also do not want to get blacklisted so they treat their tenants fair. Its a good relationship.
My husband is great with repairs and would probably be the handy man.
I’ve never sold nor rented – so I can’t say for certainty which is the greater hassle. But I think I like the idea of rental income, paying off the mortgage, and if we want to downsize in our later years, hopefully return to a home that is 100% paid in full.
That’s an interesting point about the military families, I always kind of assumed that it would be safe route to go because of the stricter oversight as well.
I can teach you how to be a top notch landlord! No worries if you decide to rent out your place.
I think it really does depend on who you are, and what inconveniences you are more equipped to deal with :) We are in the fortunate circumstance of being able to make two different house payments, but since our house (even without staging and being a mess) sold without ever being listed, it’s not a problem for us. And, it’s not going to cost us as much as we thought! We really are blessed on this one.
We have a rental property and have been very happy with it. I could throw a rock from my bedroom window and hit the rental house but we still hired a property manager. I figured a professional is much better at finding good tenants and just keeping the whole thing professional. It’s not that expensive and I’m happy I have a middle man.
It does come with it’s risks but overall I think the risk is worth the reward.
I am a landlord and would unload the house too if I were moving across country. My wife and I have talked about renting out our current house when we move in a few years. While I was excited at first, I think it will be in our best interest to sell. The reason is because before we met, my wife renovated her kitchen to be her perfect kitchen. I don’t think she could stand to see renters potentially ruin the kitchen. Deep down, I think she agrees too.
Obviously some people are more suited to property investment than others, and I suppose you only know if it’s for you when you try it. I’ve read up on it because it’s something I’m interested in getting into myself, and the top piece of advice seems to be not to let emotion get in the way: once your house becomes a rental, it ceases to be your house and it becomes an investment, so you have to treat it as such. But having spent years living in a place, loving it, taking care of it and building up memories in it, I can see how that would be very difficult indeed.
I don’t know in the long run if I’ll regret this or not, but we’ve started LLing this year. Our aim is to treat our tenants well and fairly in exchange for people taking good care of the home they’re living in so we’ll be screening new tenants pretty carefully. It’s no guarantee but it’s early days yet!
Thanks for the post. My friend’s dad rents out his place in Florida and feels totally comfortable with the distance because he uses a digital keypad that he can program from his home in Massachusetts. It sends him a notification any time someone enters the apartment and he can remotely contact authorities if the door opens without authorization. One small thing to give him peace of mind. Also, I think he has home insurance on the apartment in case of damages, and he might require the tenants to have renters insurance.