Instead of selling our house, we considered the option of renting it out, Would a month to month lease be wise

Question

Because of the economy, and the requirements for potential buyers to obtain loans, we've decided to rent out our house instead of selling it right away. We've had a few that are interested in renting the home, and 2 people that are interested in buying it. One of the potential renters wishes to only rent the house for 3 months, possibly more. We originally asked for $1,300 per months and $700.00 deposit for our 4 BR, 2 BA house. They offered to pay $1,500 per month, and $1,300 for deposit. Is this a good deal? the 4 guys that want to rent the house are contractors who are just in town for a 3 months contract, they're originally from Poland, but came from Chicago. We're new to this renting business and have no clue the necessary procedures we need to take. We need to do a background check etc. but we don't know EXACTLY what to do. Can we REQUIRE them to mow the lawn every week etc? Should all of this be listed on a contract? Should we get the 1st month rent, last month rent, and the security deposit all upfront? that's what some of our friends suggested. Thank you for your time!

Answer 1

I would go with a reputable property management company. For a small fee they will take care of everything and they know the laws in your state.  But if you want to do it yourself, just remember it is not easy being a landlord. As owner/landlord, you can draw up the contract to you requirements. Background checks are always a good idea. I think it would be difficult to get a background check for those that are foreigners. Make sure the tenants have a good work history; you can also require 3 personal references. Some states, you are not allowed to ask for last month's rent up front, only first month's rent, however you can ask for security. Usually, it is up to the owner to keep the lawn mowed, not the tenants, you can negotiate on that. Don’t forget the utilities (light, gas and water), again, you can negotiate. Your main goal is to get enough money to cover the expenses of owning a second house. Some like to make more money if it is their income property. Just remember to be careful who you rent to, trying to evict tenants can be costly. I think it is wise to have a month to month lease.  The contract should be clear, concise and in simple terms and conditions. Be very careful; remember these are strangers living at your property.

Answer 2

You can ask for first month, last month and security just to be safe. If they are only staying for 3 months though it may be a bit much. Ask them for the last months rent and a security deposit. However you cant expect them to mow the lawn for you. Maintenance of the property will be your job, so along with mowing the lawn you will be responsible to maintain the plumbing, electric and heating as well.

Answer 3

There are many agencies that will manage the rental contract for you for a small part of the monthly rent.  I highly suggest this.  They will have a good contract worked out and know all the little ins and outs.  They will also have contacts to do the screenings.

For your specific questions:

Month to month - rough.  Every time you switch renters you usually loose a month's rent.  That really adds up.

More rent vrs more deposit - I would go with more rent.  That isn't refundable where the deposit is.

You can require maintenance on the house to be done, especially if it is covered as a rule in your HOA.

Answer 4

you can require anything you want, as long as you specify it in the lease.

certainly get the deposit and first month's rent up front. your contract shuold also specify exactly when the monthly rent is due and what late charges apply.

the potential buyers might be interested in rent to own type of lease. a small part of the lease goes toward the purchase price. make sure the price is negotiated before you do this. also if the purchase falls apart make sure to spec what happens to the rent that applies to purchase.

Answer 5

if you rent for awhile then in the future you could even move back if you want to. its a good idea real estate is the best investment you can make. you can require anything you want just write up a contract. and be specific! each state has diferent laws. and there programs to help home owner such as crime free houseing.  some places have sample contracts. MAKE SURE you do background checks and credit reports! cause in WA where i manage property if the tenant doesn't pay rent they have so many laws protecting them that its VERY hard to evict them. and you could end up stuck payin for them to live in your house! just be choosy who you rent to. hope this helps

Answer 6

My parent renting out their house. I take care of renting some time.

You can require them to mow the lawn, but I don't recommand it. Tentant always leaves a dead lawn for me to fix it. If my parent ain't so cheap. I perfer hire a lawn company, add it to the price of rental.

The people renting it is very important, My parent now just pay agent one month of rental to check and make sure tentant is good people.

Before, we just judge by face and what they said. some time end up one month didn't pay, one month notice, and other month waiting for police to get them out. And, found house is damage. You can't just kick them out right away or you can be sue.

Year long lease or month to month lease. It all don't matter if they don't pay.

People new to country, in our experience seem to pay on time, and ok tentant. we don't know why.

"Light, gas, and water" I think it is simpler just charge them a fixed rate on top of their rental. Most of time they leave last bill unpaid. Water company in my area go after house owner not the name.

Answer 7

My guy wants to get rid of his house, too. But somehow no one is interested. (It is actually a double-wide.) So I told him to rent it. He said no because then he'd be responsible for all repairs. But if your house is in really good condition I'd do it. Month to month I wouldn't like. It wouldn't give me as the renter enough security. My lease agreement on my apartment doesn't have a time frame. it goes on until I move out or the owner has a reason to kick me out. And if I move out I have to give him 3 months notice, he has to do the same if he wants me out...But I live in Germany. Laws are a little different here.

Answer 8

Yep its a great move to give ur house 4 rent

instead of selling good going keep it up........

Answer 9

do yoursdelf a favour, get a solititor on the case & get a proper tennacy drawn up to protect both you and the renters.

Otherwise you are surly heading for problems.

wot if they trash it etc?

could get squatters, who knows in 2days world!

Answer 10

Yes, have a contract. Before the contract, you must do a very thorough, national background check. It is your only defense against a bad tenant. I do not recommend a 3 month lease. They will trash the place because they are not committed to staying in the community. If you must be desparate, charge 1700 per month and do get the first and last month's rent up front AND get a very large damage deposit. If they have pets and you allow them insist upon a very large, NONREFUNDABLE pet deposit for EACH animal. If you have to replace carpet because an animal has used it as a toilet, you will be glad you followed my advice. Do not spend a dime of your profit unless it is on the house mortgage. I sell mortgage acceleration software that lets you pay off your mortgage in 1/3 to 1/2 the time without refinancing, without using more than the money you already have and without using bi weekly or bi monthly pay plans. Get on the local landlord network that shares information on bad apple tenants in your community and nation wide. This will protect you from disaster. When you screen them don't just get the last landlord, get the second to last landlord as a reference. The last landlord may speak well of them because he wants to get rid of them and dump his problem on you. The second last landlord, in my experience is the one who is not afraid to speak the truth and give you what you need to know about the prosepective tenant.

I suspect that you are undercharging your prospective tenants and I think you will regret this.Remember that renters are willing to pay much more than your mortgage because they don't want the committment of a mortgage. It is what I call the renter's mentality. That is why you will see apartment communities charging rent for tiny matchbox apartments which equal or exceed your mortgage. They know and understand the renter's mentality. Be prepared to be the bad guy. No matter how hard you try to befriend the tenant they will want service from you and if you can't or won't deliver, you are the bad guy. Even when a tenant is thoroughly screened and you have a good prospect, that tenant can still turn out bad. I recommend the investment company approach, where the investment company serves as the landlord. You never hear about the campfires on the carpet and you don't have to pay the mortgage, they do. Then, after they have found a good renter, (one without the renter's mentality but rather with an owner's mentality oriented to a long term commitment, including purchasing your home), they will buy the home from you at your price and you have created a win win win deal. You win because you are not a landlord, the investor wins because he gets an investment property and the renter wins because he gets a house that he can eventually buy. I had such a deal and it didn't cost me a dime. I walked away with $26,000 in my pocket and free of a mortgage payment and the headache of being a landlord. E-mail me if you need additional help but I recommend that you switch the utilities to their name and have them pay all the utilities. Put this in writing. And have them cut the lawn at a prescribed level and at a prescribed time of day.  You must have a clean cut between your property and theirs. I do not recommend leaving the vacuum and lawn mower with them unless you have an additional deposit set aside for both those appliances. Put it in writing that they will pay for and supply the gasoline for the lawn mower. If they walk away from the deal then you should not panic. You need good tenants and not damage to pay for after three months.  Good luck.  

Answer 11

I haven't noticed if this has been recommended before but you should do a credit/background check on every one of the renters. I use: http://www.completelandlord.com/store/te... Charge them $30 or 35 each. Before you agree to rent to them. I don't think $1300 is enough deposit.  Get the utilities in their name. Put everything in writing, IN WRITING!!!  Specific late fees and dates, specific inspection times and the consequences of damage and when it is to be paid, specific rules about pets and visitors and illegal activities. Also what is to be done with anything left behind when they leave. If I were you I wouldn't rent a nice super clean house to construction workers. You might consider renting to own to your potential buyer. Get a big deposit and apply a little of the rent to down payment. This will make them a better renter.

Answer 12

This housing crisis is CAUSED by home ownership. Government promoted "home ownership" and gave incentives - to give out over risky loans - for political props.

This took homes off the rent market, and to the sale market. Flooding it. Driving down own prices, driving up rent prices.

In reality - owning only suits a portion of society - those with long term commitments to an area.

Renting is a great idea.

As for lawn mowing, you can require them, in contract. Having a mower there in the first place is a good idea - just leave them to fuel it up. Ensure them it helps maintain good status with neighbors and city and property value.