RentToOwn-HouseFinder.com

What things are important to know before I rent out my house or allow someone to rent to own?

I want to move out of state, and (so far) have not sold my house. I am considering putting it up for rent (or maybe rent to own). I just want to be as prepared as possible. Thanks.

Public Comments

1. 1. Make sure you know someone in your current area that you can hire to do maintenance since you'll be too far away to check or fix. 2. Know the rental rates for your area. Demographic differences in area can cause rental rates to be different from place to place (ie. college towns, retirement communities, etc.) If you can't rent the house for tha amount to cover your mortgage plus an amount to be used for maintenance and profits, it's probably wiser to sell. 3. Make sure the rental market is strong enough that a tenant will be occupying the dwelling for years to come. A common mistake is assuming just b/c a house is availabe, someone will rent it. 4. When renting, dont worry about increases in your morgage from higher taxes or insurance, you can always raise rents once contracts are up. 5. If the renting process seems to cumbersome but you would still like to do it, hire someone in the area for a fee to be your servicer and pay them a commission of your rents.
2. If this is your first time, I recommend letting a Realtor handle it for you. They will take 10% or so, but they will screen tenants, collect rent and make repairs etc. It is invaluable, particularly as you are moving so far from your property.
3. Be very picky about who you rent to. My parents rented out a house once and the repairs after the renters moved out were horrible. There were TAR foot prints going up one wall and across the ceiling in one of the bedrooms The kitchen had been literally torn apart, cupboards pulled down off of the walls and broken up on the floor, the hardwood floors suffered damage, the master bathroom had beed literally gutted (they destroyed the walls as well as the entire shower) the back yard had been completely dug up and garbage was strewn all over.
4. If you are in CA, I would highly recommend against leasing or L2O. Sell it. Otherwise, there are lots of things to look out for. FIrst off, make sure that you either replace the toilets and fixtures, or replace the innards so you don't have any problems. Have the furnace and hot water heater maintained, as well as the A/C. Fix anything that you think will or may become a problem--because it will! If you're going to do a lease-to-own, make sure that the person you do the L2O deal with puts down a good chunk of change (minimum of $5000, but usually about 10,000) so they don't decide to simply leave and you have a house with lots of clean-up that you need to do before you sell it. Determine what fair rent for a house your size in the neighborhood it's in will rent for, and charge an extra $300/mo that will be applied to the person's closing costs when they exercise their L2O option. Recognize that most of the time L2O options are so people with bad credit can eventually own a house. DO A BACKGROUND CHECK on them, and check past rental landlords. Any problems, don't do the deal with them--you don't need the headaches. There's a lot more. Talk to realtors in your area, do Web searches, and do you homework, otherwise you'll run into problems.