Let's hear your experience with rental properties.

[Big A]

My new job is requiring a relocation back to Sacramento, and our initial plan was to sell our house in Frisco, but with the uncertainty of the next few months I'm considering other possibilities and options. If the housing market does drop or bottom out, I'm looking at the possibility of renting the house out, until the market comes back in the area at a minimum, or perhaps longer if the monthly numbers are sustainable.

It's a large 5 bedroom house in Frisco, with landscaping and pool maintenance that needs to be contracted and in the lease, in terms of minimal tenant responsibilities. I'd also be looking into finding a good management company to do the tenant vetting and other duties since we'll be out of state, what else should I be aware of?

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[Rick Modena]

You will not be making any money off of it using a MC, but they can make it somewhat hassle free. Renters have a lot of rights in Texas, something goes wrong and you will be on the hook for all costs. Hopefully since you have a nice home the MC will get in a decent renter preferably an executive that his company pays for the lease.

I was thinking about renting my home before I moved to Parker in December, but my hood in Melissa had several renters on our block and those owners had nightmare tenants. One home 4-5- bedroom 2-story had three families living in it with a few kids. Cops were over a few times that I saw the EMS once for what looked like a fight. When they moved out, the owner tried to clean the carpets but wound up having to replace the carpet in the entire house. They had dogs and a fish tank they left on the curb along with a filthy refrigerator and a mound of trash that the owner that had to have removed.
Another renter a few houses down had to be evicted by the Collin County sheriffs office and it took several visits since they were either not home or didn't want to open the door when the CCS showed up. The house was so bad when they moved out that it took the owner a month to replace the carpet with laminate hardwood floors and re-paint the entire interior of the home, smokers and just plain dirty people.
There were a few other renters, but I never met the owners of those, but it seemed that 6 months to a year and different people were moving in to all the rentals I saw on just our block.
These homes were in the Liberty subdivision, Highland, Perry and K.Hov homes, nothing under $250k and the new phase was $350k and above. A very nice hood, but more than a few renters that didn't seem to take care of others peoples property and a lot of car break-ins.
I know there are a few people that rent here that seem to make decent money and have few problems, but I know that Chris had a nightmare tenant...

[Big A]

Thanks for sharing Henry, this is my worst-case scenario, though outside than the loss of revenue due to an eviction, replacing the carpet upstairs and fresh paint seems like small beans as compared to selling at a significant loss. Especially when the expectation is to make is all back when we do sell. At the end of the day all I care about is that the math works out in the long run, with minimal added stress. I do think that properly vetting the renting family will prevent most of the nightmare stuff, so hiring a management company is more about paying for my peace of mind, and will likely pay for itself in saved repair/replace costs down the road.

Anyone know if I can legally stipulate that only the renter's immediate family can move in, and if there's any recourse if they disregard and move do move a second family in? At the end of the day I honestly don't care how many occupants move in, so long as rent is paid on time and no damage is done, but the multi-family scenario does seem to multiply the possibility. A corporate rental scenario would be optimal I would think.

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[TX_92_Notch]

If you're basically looking to break even and hold the property until the market will allow you to sell it without taking a bath, you're probably best served using a management co (MC).

We used a MC before and I won't do it again. They charged one month's rent to find a tenant and then 8% per month thereafter. The tenant also called for maintenance almost every single month, essentially nickel and diming us to death. I pretty much broke even after a year, maybe putting a few hundred dollars in my pocket for the year. And I'm WAY in the black on that house by the basic math.

[Stephen]

I heard you mention Tom Thumb in the covid thread.. are u near Lebanon/423?

[Big A]

If you're basically looking to break even and hold the property until the market will allow you to sell it without taking a bath, you're probably best served using a management co (MC).

We used a MC before and I won't do it again. They charged one month's rent to find a tenant and then 8% per month thereafter. The tenant also called for maintenance almost every single month, essentially nickel and diming us to death. I pretty much broke even after a year, maybe putting a few hundred dollars in my pocket for the year. And I'm WAY in the black on that house by the basic math.

I'd prefer to break-even in terms of monthly rent+MC versus mortgage, even slightly negative, solely on the premise that we'll be selling as soon as the market comes back. It all depends on how much it drops by June, and what the outlook is for the next couple years. Perhaps this is fodder for a separate thread, but is the market truly inflated like potential buyers want to believe, such that we won't break even in a couple years? If all signs point to yes, then we may just sell, cut our losses up front, and get it back when we buy in Sacramento.

I'd do all of the nickel and dime maintenance if I were going to be local, but I won't have that option. This does raise a good point, I've always read that the bigger the house the more maintenance is needed, though my experience is that our previous 1,600 sqft house took way more time and money due to being older. Out of curiosity, what all were you asked to have fixed/maintained so often? Was it reasonable stuff that you just never got around to doing before renting out, or truly a OCD renter?

I heard you mention Tom Thumb in the covid thread.. are u near Lebanon/423?

We're in the neighborhood that's across Ohio from LTHS.

[bcoop]

The ONLY way I'd consider renting a house like yours is via Corporate Lease. This will 1) be rent stable and 2) limit your exposure to trashy tenants. It can still happen, just less likely imo. Discuss with a property manager how to target that market.

[GrayStangGT]

After my wife and I got married we rented out her townhouse. I'm managing it but I did use my realtor to get it rented and do all the backgrounds and such on the tenants. So far it hasn't been a bad experience at all, I've gone over a few times and made a couple minor repairs. They don't keep a house like I do but it also doesn't appear they are tearing it up either.

[Gasser64]

If you're basically looking to break even and hold the property until the market will allow you to sell it without taking a bath

You hear that a lot, but then you've got those companies that own 50 or 100 rent houses and duplexes. Somehow they profit enough to keep going... maybe it's just the huge check they get each month. Somewhere there's a tipping point. I'd be curious to know exactly where that is.

[TX_92_Notch]

You hear that a lot, but then you've got those companies that own 50 or 100 rent houses and duplexes. Somehow they profit enough to keep going... maybe it's just the huge check they get each month. Somewhere there's a tipping point. I'd be curious to know exactly where that is.

There is no one-size-fits-all when it comes to rental property. The math works completely different for someone that owns a property with no mortgage versus someone that just mortgaged the property at market value to try and make money renting it.

I've owned this house since 2003 and refinanced when rates were really low so my payments are crazy low, plus it'll be paid off in 3 years.

[TX_92_Notch]

I'd do all of the nickel and dime maintenance if I were going to be local, but I won't have that option. This does raise a good point, I've always read that the bigger the house the more maintenance is needed, though my experience is that our previous 1,600 sqft house took way more time and money due to being older. Out of curiosity, what all were you asked to have fixed/maintained so often? Was it reasonable stuff that you just never got around to doing before renting out, or truly a OCD renter?

First off, you will discuss the maintenance terms with the MC. You can tell them NO maintenance will be completed without your approval or you can set a "not to exceed". We did that, thinking we'd save ourselves the hassle of dealing with pesky little stuff.

The disposal was replaced one month. I had just installed it maybe 18 months before and it was a nice unit and never once had an issue while I lived in the house. The instant hot water heater was replaced - same story - it was less than 2 years old. Almost every month was something along those lines, to the point that they ate my profit almost every single month with maintenance. Factor those repairs and the full month's rent ($1,600 at the time) charged for finding a tenant and I essentially rented that house out of the kindness of my heart for that year.

We have some friends living in the house now and there hasn't been a single maintenance call in roughly two years since dumping the management company. Imagine that.

[TX_92_Notch]

After my wife and I got married we rented out her townhouse. I'm managing it but I did use my realtor to get it rented and do all the backgrounds and such on the tenants. So far it hasn't been a bad experience at all, I've gone over a few times and made a couple minor repairs. They don't keep a house like I do but it also doesn't appear they are tearing it up either.

Check out Zillow's rental property manager. I'm just getting into it, but it looks nice.

The have leases, background check tools, etc., all free. The tenants provide all of their info to Zillow and you can screen all of the applicants in one location. You only pay for the listing WHILE it's listed for rent (around $10/month IIRC). No charge while the house is rented.

[Big A]

First off, you will discuss the maintenance terms with the MC. You can tell them NO maintenance will be completed without your approval or you can set a "not to exceed". We did that, thinking we'd save ourselves the hassle of dealing with pesky little stuff.

The disposal was replaced one month. I had just installed it maybe 18 months before and it was a nice unit and never once had an issue while I lived in the house. The instant hot water heater was replaced - same story - it was less than 2 years old. Almost every month was something along those lines, to the point that they ate my profit almost every single month with maintenance. Factor those repairs and the full month's rent ($1,600 at the time) charged for finding a tenant and I essentially rented that house out of the kindness of my heart for that year.

We have some friends living in the house now and there hasn't been a single maintenance call in roughly two years since dumping the management company. Imagine that.

Just curious, did that family want to renew, and were you able to tell then no thanks? I suppose I could deal with a year of that, WH is new, as are both AC units, so nothing too expensive to go wrong. I would hope this is the exception rather than the rule, some people are just wired different.

[Rick Modena]

Just curious, did that family want to renew, and were you able to tell then no thanks? I suppose I could deal with a year of that, WH is new, as are both AC units, so nothing too expensive to go wrong. I would hope this is the exception rather than the rule, some people are just wired different.

Now for a look at my rental experience. When I sold the big house in Allen, I couldn't find what I needed so we rental a small home in McKinney on the West Ridge golf course, very nice view as the home backed up to the 17 hole.
We rented from an Asian couple that sucked balls. First year no problems, second and third year the main sewage line would back up because of a willow tree in the front yard, who ever thought planting a tree above the MSL was a complete idiot, of course all the toilets and showers would back up and make a complete mess, both times it happened on a weekend. We called the owners the first time and they showed up with a handheld snake for cleaning sinks. Then they then told us to call the warranty company, day 4 and they come out, they snake the MSL from the street and run a camera and tell me about the roots. Next year it happens again, I call the owners tell them they need to send a 24 hours rotor rooter, because this issue is on a weekend, they refer me to the warranty company again. Day three or four and they show up do the same thing but inform me that the warranty company will not pay again for this re-occurring problem and the tree needs to be removed.
We finally found a home in Melissa and moved out. Before we moved we asked if we could clean the home ourselves since it was just us two, no pets and we keep a clean home anyway. They agreed, we had the carpets cleaned, we left it better than we found it. When we went to get our deposit ($2700 hundo), they refused, they said that the house wasn't cleaned correctly they found a couple of spider webs on a few windows and they had to paint a few rooms?!
We had used our realtor to find the house, she owns a few rental units and she never asked for anything like that, she said that she would usually take care of things like that especially if she had good renters, which we were, never late on the rent and gave her back the house and in better condition than we rented it from. We actually spent a few days cleaning it when we moved in since it was not professionally cleaned, I got into an argument with them no engrish speaking clowns and told them according to the rental agreement they had 30 days or they would be hearing from my attorney. I didn't wait, I had him send a letter threatening to sue and in a few days I received my entire deposit.

[TX_92_Notch]

Just curious, did that family want to renew, and were you able to tell then no thanks? I suppose I could deal with a year of that, WH is new, as are both AC units, so nothing too expensive to go wrong. I would hope this is the exception rather than the rule, some people are just wired different.

They actually renewed on a month-to-month basis after the first year was up. I allowed it because the repairs had slowed down and they were actually good tenants. Never missed rent and took pretty good care of the house, other than never once trimming the hedges and letting them grow wildly out of control.

They were my first legit tenant and I think it's luck of the draw. My brother is one of those tenants you hope you never get, constantly bitching to the landlord and complaining about every little thing. Other people are just happy to have a roof over their heads and they never say a word.