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Rental Property Advice #4602377
12/13/17 08:37 AM
12/13/17 08:37 AM
Joined: Nov 2007
Posts: 1,466
New Jersey
Rock_Hudstone Offline OP
Rock_Hudstone  Offline OP
Joined: Nov 2007
Posts: 1,466
New Jersey

A friend of mine is looking to rent out her former 3 bed single family home but doesn't have the time to find and screen for tenants.

I suggested a property management company but most seemed to deal with multiple units or commercial RE.

Any advice from those who have or had rental properties about how best to get started. The house is in the Woodbridge N.J. area so not the best class of potential tenants.

-Thanks



Re: Rental Property Advice [Re: Rock_Hudstone] #4602379
12/13/17 08:40 AM
12/13/17 08:40 AM
Joined: Sep 2004
Posts: 21,934
Orlando, FL
Mr Nice Offline
Mr Nice  Offline
Joined: Sep 2004
Posts: 21,934
Orlando, FL
Wolf has excellent advice on this subject...

Re: Rental Property Advice [Re: Rock_Hudstone] #4602403
12/13/17 09:09 AM
12/13/17 09:09 AM
Joined: Dec 2016
Posts: 2,203
VA
maverickfhs Offline
maverickfhs  Offline
Joined: Dec 2016
Posts: 2,203
VA
Wolf is DA man with a lot of insight and valuable advice!!!!


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Re: Rental Property Advice [Re: Rock_Hudstone] #4602430
12/13/17 09:29 AM
12/13/17 09:29 AM
Joined: Oct 2009
Posts: 3,518
Wet side WA
JohnnyJohnson Online content
JohnnyJohnson  Online Content
Joined: Oct 2009
Posts: 3,518
Wet side WA
If she's so lazy she claims she doesn't have the time sell it. There will be headaches it's part of the rental business. I had rentals for over 20 years. You run your applicants through an agency. They will do all the checking you need. I ran them for Credit, rent history and for wants and warrants. They paid for the check if they failed they were out their fee for the renter check. If they pasted I gave it back on the first months rent.

Property management companies will screw you they take the easy road they have no skin in the game. Their just there to take you money because you're to lazy!

Last edited by JohnnyJohnson; 12/13/17 09:37 AM.

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Re: Rental Property Advice [Re: JohnnyJohnson] #4602436
12/13/17 09:42 AM
12/13/17 09:42 AM
Joined: Nov 2007
Posts: 1,466
New Jersey
Rock_Hudstone Offline OP
Rock_Hudstone  Offline OP
Joined: Nov 2007
Posts: 1,466
New Jersey
Originally Posted By: JohnnyJohnson
If she's so lazy she claims she doesn't have the time sell it.
!

Thats what she is thinking about doing. Unfortunately she bought in 2006 at the very top of the last RE bubble and paid way too much, so even after all these years they'd still probably take about a $40,000 loss on the place, plus selling costs.

Hence, my strong advice to rent.

Re: Rental Property Advice [Re: Rock_Hudstone] #4602443
12/13/17 09:52 AM
12/13/17 09:52 AM
Joined: Oct 2005
Posts: 1,679
South Dakota
otis24 Offline
otis24  Offline
Joined: Oct 2005
Posts: 1,679
South Dakota
Do a contract for deed with a hefty down payment (20%). If the purchaser defaults, they are out their down payment and all of the payments that they have made. Provided that it has been kept in good shape, she can resell at a more favorable time when the housing market is on an uptick. Worse case scenario, she does another contract for deed with someone else if she has to repo from the first purchaser. Just a thought.


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Re: Rental Property Advice [Re: Rock_Hudstone] #4602446
12/13/17 09:53 AM
12/13/17 09:53 AM
Joined: Aug 2011
Posts: 3,387
Chicago,IL,USA
pandus13 Offline
pandus13  Offline
Joined: Aug 2011
Posts: 3,387
Chicago,IL,USA
Originally Posted By: Rock_Hudstone
Originally Posted By: JohnnyJohnson
If she's so lazy she claims she doesn't have the time sell it.
!

Thats what she is thinking about doing. Unfortunately she bought in 2006 at the very top of the last RE bubble and paid way too much, so even after all these years they'd still probably take about a $60,000 loss on the place, plus selling costs.

Hence, my strong advice to rent.


For renting to lower class (I hope it's not D or F, but C+) you need to tenant-proof the house:
-same paint color/color scheme, eggshell-finish preferred
-change all internals for toilets
-change any old faucet and connections
-how old is: roof, water heater, ac/furnace
-pet friendly/proof?
-have backup funds (6months-1year of rent) set aside

Choose a good tenant, based on history. Wait for it if necessary. A bad tenant would cost you more.

Also, how do you expect to rent in winter?

Also this is NOT for beginners!


Now beside all JohsnsonJohnson has said, if you have any problem with mechanicals/roof/ac/heat, the property management company will just call their preferred provider, and charge you extra.

Also, in low class areas, you have to be really lucky to find a good company: the price is tough to swallow long-term/make a profit.


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Re: Rental Property Advice [Re: Rock_Hudstone] #4602448
12/13/17 09:54 AM
12/13/17 09:54 AM
Joined: Dec 2007
Posts: 567
Madison, Wisconsin
TWG1572 Offline
TWG1572  Offline
Joined: Dec 2007
Posts: 567
Madison, Wisconsin
My sister went down this road, she had a very similar scenario with her place between Baltimore and Annapolis. Bought at the high, moved, and didn't want to sell and realize the large loss she would have on the property. So she decided to rent.

She tried doing it herself. Didn't go well, had to evict non-paying tenants. Hired a property management company. Didn't go well. Actually did some research and hired a second property management company - it sounds like things are working out OK finally. She's making enough to pay the mortgage and it may turn into a rental investment for her, vs. the initial plan to bail out when the market recovered.

Being a landlord isn't for everyone. If she doesn't think it's for her - time wise, or having to deal with problem tenants - then hiring a well referred management company makes sense to me. Yes, they charge a fee. But trying to do it yourself and messing up has some pretty severe financial repercussions too.

Re: Rental Property Advice [Re: otis24] #4602449
12/13/17 09:55 AM
12/13/17 09:55 AM
Joined: Aug 2011
Posts: 3,387
Chicago,IL,USA
pandus13 Offline
pandus13  Offline
Joined: Aug 2011
Posts: 3,387
Chicago,IL,USA
Originally Posted By: otis24
...Worse case scenario, she does another contract for deed with someone else if she has to repo from the first purchaser. Just a thought.

I'm not sure if NJ is really landlord-friendly for tenant evictions.....


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08 Yaris
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Re: Rental Property Advice [Re: Rock_Hudstone] #4602451
12/13/17 09:55 AM
12/13/17 09:55 AM
Joined: Apr 2012
Posts: 5,593
MA
Wolf359 Offline
Wolf359  Offline
Joined: Apr 2012
Posts: 5,593
MA
Unfortunately learning how to screen tenants has taken a very long time to do and even if you screen them well, all that means is that they will be good for the first few years and then you never know what can happen afterwards. People die, get sick, divorced, become alcoholics, get hooked on drugs, etc.

Re: Rental Property Advice [Re: Rock_Hudstone] #4602468
12/13/17 10:31 AM
12/13/17 10:31 AM
Joined: Sep 2009
Posts: 181
USA
zvm77us Offline
zvm77us  Offline
Joined: Sep 2009
Posts: 181
USA
The good news it's not to hard to evict a non paying tenant in NJ, Now if this was across the pond in NYC it would take even over a year.

Re: Rental Property Advice [Re: Rock_Hudstone] #4602471
12/13/17 10:33 AM
12/13/17 10:33 AM
Joined: May 2012
Posts: 5,671
Fort Lauderdale, FL
DoubleWasp Offline
DoubleWasp  Offline
Joined: May 2012
Posts: 5,671
Fort Lauderdale, FL
Mostly going to come down to her. Takes a special kind of person to do bad area rentals. The service side of the real estate market can be just as bad as the tenants. Know a lot of people unhappy with their property management company.

From your description, I doubt she would find being a landlord worthwhile.

I know plenty of people with low grade rental properties, and most of them seem mean and unhappy when the topic comes up.

Unless she can find some REALLY effective property management, she'll probably go through he'll.

One way or another, she needs to wait. Nobody wants to move during Christmas or winter if they can help it.


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Re: Rental Property Advice [Re: Rock_Hudstone] #4602476
12/13/17 10:40 AM
12/13/17 10:40 AM
Joined: Nov 2008
Posts: 9,290
Phoenix
dishdude Online content
dishdude  Online Content
Joined: Nov 2008
Posts: 9,290
Phoenix
I think this company will handle everything, of course you pay for their service...but course it would be a lot less than getting a bad tenant in...a lot of risk to owning only one rental property.

http://renterswarehouse.com/offices/


2018 Challenger SRT 392 PUP 0w-40 Wix 57899XP
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Re: Rental Property Advice [Re: TWG1572] #4602480
12/13/17 10:43 AM
12/13/17 10:43 AM
Joined: Apr 2012
Posts: 5,593
MA
Wolf359 Offline
Wolf359  Offline
Joined: Apr 2012
Posts: 5,593
MA
Originally Posted By: TWG1572
My sister went down this road, she had a very similar scenario with her place between Baltimore and Annapolis. Bought at the high, moved, and didn't want to sell and realize the large loss she would have on the property. So she decided to rent.

She tried doing it herself. Didn't go well, had to evict non-paying tenants. Hired a property management company. Didn't go well. Actually did some research and hired a second property management company - it sounds like things are working out OK finally. She's making enough to pay the mortgage and it may turn into a rental investment for her, vs. the initial plan to bail out when the market recovered.

Being a landlord isn't for everyone. If she doesn't think it's for her - time wise, or having to deal with problem tenants - then hiring a well referred management company makes sense to me. Yes, they charge a fee. But trying to do it yourself and messing up has some pretty severe financial repercussions too.


I suppose it's not that hard to actually screen tenants, I guess the key is to actually do it and if you're too strict, they disappear. Sometimes you want that, other times you don't. For a bad section of town, you probably won't get people that have good credit scores and good incomes. That's the basics, get someone with a credit score over 700 and a good job where the rent isn't more than 30% of income, if you fine someone where the income is just 20-25% of the rent, even better. Then run background checks and verify employment (pay stub) and check landlord references. Very few people actually seem to do all that, over the years I've had very few people call me for a landlord reference although I've rented to lots of people over the years.

Re: Rental Property Advice [Re: Rock_Hudstone] #4602486
12/13/17 10:51 AM
12/13/17 10:51 AM
Joined: Jan 2008
Posts: 10,968
OH
SatinSilver Offline
SatinSilver  Offline
Joined: Jan 2008
Posts: 10,968
OH
One trick is to go outside while they're checking out the apartment and look at their car. Esp the inside and see how neat and clean it is. If it's a pig sty inside then that's how the apartment will look most likely.

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