Any landlords here?

[SizzlininIN]

DH and I are going to go look at a house for sale tomorrow. We are thinking about buying it and fixing it up and living in it till we find a house we want to settle into. We will either rent it out later or sell it for a profit.

Any landlord tips will be appreciated.

 

[htc]

Do you plan on using a property management co? Also try to find out if your city or county has a class for new landlords. My city does, check out their website too, they could have the training materials available for free download. (the class was free too) Our city gears it to help you find tenants that will be law abiding and not turn your rental into a druggie houese. It also covered a list of most common violations.

Oh, when you have your house inspector look at the property, make sure she/he knows it will be a rental, then they can tell you what needs to be done (if anything) to make it up to code. PM me if you have anymore questions. Good luck!!

 

[mish]

Sizz, are you thinking about buying a property for income or to actually live in (if it's okay to ask a few questions to get a better picture)?

When you mention fix it up - are you looking for (I think it's called a flip flop) - a fixer-upper at low cost & doing major renovations (out of pocket) & put it back on the market? If I'm not mistaken, think there was a law where you had to live in the home for a certain amount of time/years. Check the laws in your state or call a realtor.

Also, keep in mind, if you want to find a home to live in & you rent the property rather than selling it - you might have to (depending on your finances) need to carry two mortgages, property taxes, & apply for another loan. You will also need to take into consideration the property taxes you will be paying on a property you are not residing in.

Re rental agreements/landlord:

You can go to any stationery store & buy pre-printed rental agreements. Could use it as a guideline & add your own stipulations. Be sure to ask for references & follow up on potential renter's credit history as well. (If a renter can't come up with the rent - you may have headaches later on as well as damage to your property.) Be sure to ask for deposits etc. When interviewing, trust your best instincts.

If you have an attorney, you can let them handle it for you & look over all agreements & advise you.

My understanding is, for a fee, a realtor can take care of rentals, etc., without your having to be directly involved.

Weigh out all the pros & cons, & see if you have a good shot at coming out ahead. I wish you good luck.

 

[mish]

Another thought:

Buy a bigger better house (i.e. more bedrooms/baths, etc.) & rent the rooms out. Or - buy some ocean-front property & turn it into a Bread & Breakfast.

 

[jennyema]

If I'm not mistaken, think there was a law where you had to live in the home for a certain amount of time/years. Check the laws in your state or call a realtor..

I don't know of any law that makes you live in a home. After all, lots of people own 2, 3 and even more homes.

But there is a law concerning the deductibility of a capital gain on sale of real estate that requires you to establish that it was your pricipal place of residence for some period of time. Maybe that's what you are thinking of.

I would highly suggest consulting an attorney to draw up the contracts and advise you on the variety of laws that come into play when leasing property.

 

[mish]

I don't know of any law that makes you live in a home. After all, lots of people own 2, 3 and even more homes.

But there is a law concerning the deductibility of a capital gain on sale of real estate that requires you to establish that it was your pricipal place of residence for some period of time. Maybe that's what you are thinking of.

I would highly suggest consulting an attorney to draw up the contracts and advise you on the variety of laws that come into play when leasing property.

I highly suggest an attorney as well. In my neck of the woods real estate is at its prime. There was a time when people were buying up properties just to resell & not to live in. Again, check and see what the laws are in your area.

The capitol gain thing - think that applies to when you sell your home & move into a rental, depending on profit. I asked about this, & I think that's my understanding. Check with tax laws as well.

 

[gwkr36a]

DH and I are going to go look at a house for sale tomorrow. We are thinking about buying it and fixing it up and living in it till we find a house we want to settle into. We will either rent it out later or sell it for a profit.

Any landlord tips will be appreciated.

Try this site....http://www.johntreed.com/realestate.html

A lot of free help there!

 

[jennyema]

A capital gain on real estate doesn't depend on moving into a rental.

It depends on the house being sold being your principal place of residence -- owned by you and occupied for 2 out of the five years prior to the sale.

The first $250,000 of the capital gain is tax free. You pay capital gains tax on any profit above 250k (500k if married and filing jointly).

So SIZZ would have to pay tax on the entire capital gain if they do not own and occupy the house for 2 out of the 5 years prior to selling it.

 

[mish]

Sizz, if I may say - on a personal note, as part of our little "community" - I applaud you. Know you've been going through some emotionally tough times; & looking toward the future, is a good sign. Kiddo, you put the last house up for sale & did everything you needed to do. I know you will be successful. Great support system here as well.

 

[SizzlininIN]

Thanks everyone..........and thanks Mish for the kind words. Well we put a bid in and will hear tomorrow if its been accepted or if we have to up the bid......someone else also put a bid in on it. Its a total fixer upper....about the only thing we wont be tearing down is the fireplace.....just refinishing that. I hope we can get it'll occupy my time and get me focused on something else. I'll let you all know. We'll live in it till we find a house we are wanting to settle into. Thanks again everyone!

 

[SizzlininIN]

Well we found out tonight we didn't get the house.....still don't quite understand it. The attorney that was handling it went with the other bidders bid that bid before us. I guess they'd been working on a deal for 2 weeks. The only thing I can figure is its someone the owner knew and wanted to get the house so they took the lesser bid.........stupid in my opinion but oh well I guess it wasn't meant to be.
The realtor did say that there is a house coming on the market that will suite us better and she's suppose to have all the inf. tomorrow. I'm a little bummed because I got really excited at the aspect of doing another remodel...........I can't believe I said that....said I'd never do that again. Spent all day making out a floor plan and filling all the details.....I was so sure we'd get it. Oh well...........we did find a truck for DH.......can't live in it but at least something turned out right today.

 

[jennyema]

That's too bad!

But don't get too about it. There are other houses out there! You might ask the RE agent why your bid wasn't accepted, just to help you in thinking about future bids. But remember that the RE agent doesn't work for you.

 

[gwkr36a]

Jennyema is correct. A RE is not someone that will be working for you. There is a whole network of people that make a living buying distressed real estate. Sometimes you can find a group in your area that you can join and share ideas with. Other sources are banks called REO's (real estate owned) properties that they have foreclosed on and really dont want, they will go out of there way to help you get these properties off their books, banks do not want to own real estate. Another source is the county building in your area to check the tax rolls, where you can find properties that will be sold for taxes due (this is public record) . A final source is just driving around your neighborhood, when you see a house that is very poorly maintained it is
usually a sign that a sale maybe coming soon, (divorce, death, job loss), are all reasons for this. and for looking for this kind of house.

 

[SizzlininIN]

Thanks for the advice. The realtor said she wasn't sure why our bid didn't go through she thought the attorney would want a bidding war. She said she didn't know why it happened and sometimes things happen that don't make since. I didn't ask her what the closing bid was but I will when she calls me with the other houses information. Oh well like I told DH it wasn't meant to be evidentally because I prayed if it was something we were suppose to do then it would all work out. I really had some awesome design ideas though........that would of worked well with this house. Oh well I'm done fretting about it. Thanks everyone!

 

[mish]

Sorry you didn't get the house, Sizz. Sounds like you would have had to build a house around the fireplace. Is that legal - to go with a lower bid? Odd. Maybe something better will come along. HUD might be another resource. Re looking in a rundown area for a lower price - I was shocked to learn, in some cases, when a homeowner can't come up with the payments & the bank is going to repossess/foreclose, the homeowner sometimes takes revenge & "trashes" (wrecks) the property, even in the best of neighborhoods. I've noticed doors that look like they had been kicked in & patched up, & put up for sale. People do strange things under pressure.

Re realtors - I had to fire the last one who told me it would cost me $30 to close. I knew that was not correct. Plus he was one wacky guy. The last property I sold, the realtor strongly urged me to take the first offer as it might be the only one I get. I never should have listened. Saw the property I sold, come up on the market at a much higher price & gone/sold in a very short period...btw, beautiful area, perfect condition, upscale neighborhood, well manicured/maintained grounds, all the bells and whistles.

I've been looking for another property for a few years & nothing is available here that I would/could consider even though my property has almost tripled in value. Have even thought about getting out of L.A. & relocating - something I don't really want to do. Have seen ads run on tv for an 800 no realtor phone number. Don't know how that works & if I'd be taking a big risk. I feel "stuck" and frankly a little depressed. Sorry - don't mean to go on and on here - but it's probably one of the most important and costly decisions I'll ever have to make. So...go slowly & hold out for what you really want.

P.S. If I never see another carboard box again, I'll be a happy camper. Best of luck, Sizz.

 

[SizzlininIN]

This is the same realtor that worked with us on selling our other house.......she did a really good job with that.
I'll just be glad to find another home. I said that I didn't want to do another remodel but I really do love doing it. If there was a school close for interior design I'd be signing up.
Sorry your fretting with selling/moving.....hope it works out for ya.

 

[jennyema]

The seller can accept any offer they want to, really*. But most of the time they accept the highest one. But it's common to accept lower offers if the terms are better (cash, for example).

The RE agent may be able to tell you if there is anything either positive (eg, cash offer) or negative (eg, contingent on sale of other property) in the terms of your offer -- may be helpful when you are thinking of making future offers.


* assuming they are not violating other laws, eg. discrimination, etc.

 

[mish]

Sizz, glad you are happy with your realtor. When you're ready to rent it out, sure there will be many landlords or other resources to guide you when that time comes.